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Healthy Green Group Holding Ltd. – IPO: ‘F-1/A’ on 8/22/23

On:  Tuesday, 8/22/23, at 3:49pm ET   ·   Accession #:  1493152-23-29814   ·   File #:  333-269833

Previous ‘F-1’:  ‘F-1/A’ on 8/17/23   ·   Latest ‘F-1’:  This Filing   ·   5 References:   To:  Healthy Green Group Holding Ltd. – Previous ‘F-1/A’ on 8/17/23 To:  Healthy Green Group Holding Ltd. – ‘F-1/A’ on 8/15/23 To:  Healthy Green Group Holding Ltd. – ‘F-1/A’ on 8/3/23 To:  Healthy Green Group Holding Ltd. – ‘F-1/A’ on 7/12/23 To:  Healthy Green Group Holding Ltd. – ‘F-1/A’ on 5/17/23 

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 8/22/23  Healthy Green Group Holding Ltd.  F-1/A                  4:3.5M                                   M2 Compliance LLC/FA

Document/Exhibit                   Description                      Pages   Size 

 1: F-1/A       Pre-Effective Amendment to Registration Statement   HTML   2.71M 
                by a Foreign Issuer                                              
 2: EX-5.3      Opinion of Counsel re: Legality                     HTML     51K 
 3: EX-23.1     Consent of Expert or Counsel                        HTML      6K 
 4: EX-23.5     Consent of Expert or Counsel                        HTML      4K 

As filed with the Securities and Exchange Commission on August 22, 2023

Registration No. 333-269833

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Amendment No. 9

to

FORM F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Healthy Green Group Holding Limited

(Exact name of registrant as specified in its charter)

Not Applicable

(Translation of Registrants name into English)

Flat 2-3, 4/F

Join-In Hang Sing Centre

2-16 Kwai Fung Crescent

Kwai Chung, New Territories

Hong Kong

(+852) 3181 4488

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Cogency Global Inc.

122 East 42nd Street, 18th Floor

New York, New York 10168

800-221-0102

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.

☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

The term new or revised financial accounting standard refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed or supplemented. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission of which this prospectus is a part is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated August 22, 2023

PRELIMINARY PROSPECTUS

Healthy Green Group Holding Limited

2,000,000 Ordinary Shares

This is an initial public offering of ordinary shares, US$0.001 par value per share (“Ordinary Shares”) of Healthy Green Group Holding Limited (“Healthy Green,” the “Company,” “we,” “our” or “us”). We are offering 2,000,000 Ordinary Shares. We anticipate that the initial public offering price of the Ordinary Shares will be between US$6.00 and US$7.00 per Ordinary Share.

Prior to this offering, there has been no public market for our Ordinary Shares. We have applied to list our Ordinary Shares on the NYSE American under the symbol “GDD”. This offering is contingent upon the listing of our Ordinary Shares on the NYSE American or another national securities exchange. There can be no assurance that we will be successful in listing our Ordinary Shares on the NYSE American or another national securities exchange and, if this listing is not successful, this offering may not be completed.

Investing in our Ordinary Shares involves a high degree of risk, including the risk of losing your entire investment. See Risk Factors beginning on page 19 to read about factors you should consider before buying our Ordinary Shares.

We are an “Emerging Growth Company” and a “Foreign Private Issuer” under applicable U.S. federal securities laws and, as such, are eligible for reduced public company reporting requirements. Please see “Implications of Our Being an Emerging Growth Company” and “Implications of Our Being a Foreign Private Issuer” beginning on page 15 of this prospectus for more information.

We are not a Chinese operating company but a holding company incorporated in the Cayman Islands. As a holding company with no material operations of our own, we conduct our operations solely through Organic Gardens International Limited (“Organic Gardens”), Greendotdot.com Limited (“GDD Hong Kong”) and Linden Tree Consultancy Limited (“Linden Tree”) (collectively, our “Operating Subsidiaries”). Each of these three operating subsidiaries is established under the laws of Hong Kong. The Ordinary Shares offered in this offering are shares of the Cayman Islands holding company. Investors of our Ordinary Shares are not purchasing and may never directly hold equity interests in our Operating Subsidiaries.

Our Operating Subsidiaries conduct their business in Hong Kong, a Special Administrative Region of the PRC, and some of the suppliers of the Operating Subsidiaries are PRC companies that may have shareholders or directors that are PRC individuals. Also, some customers of our retail outlets may be PRC individuals. Conducting business in Hong Kong involves risks of uncertainty about any actions the Chinese government or authorities in Hong Kong may take. See “Prospectus Summary - Recent Regulatory Development in the PRC” beginning on page 13 and “Risk Factors – Risks Relating to Doing Business in the Jurisdictions in which our Operating Subsidiaries Operate” beginning on page 25.

There are significant legal and operational risks associated with being based in or having the majority of operations in Hong Kong, including that changes in the legal, political and economic policies of the Chinese government, the relations between China and the United States, or Chinese or U.S. regulations may materially and adversely affect our business, financial condition and results of operations. Further, the Chinese government may disallow our current corporate structure. Recently, the PRC government initiated a series of regulatory actions and made a number of public statements on the regulation of business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas, adopting new measures to extend the scope of cybersecurity reviews, and expanding efforts in anti-monopoly enforcement. No effective laws or regulations in the PRC explicitly require the Company to seek approval from the China Securities Regulatory Commission (the “CSRC”) or any other PRC governmental authorities for the Company’s overseas listing plan, nor has the Company or any of the Operating Subsidiaries received any inquiry, notice, warning or sanctions regarding the planned overseas listing from the CSRC or any other PRC governmental authorities. However, since these statements and regulatory actions by the PRC government are newly published, and official guidance and related implementation rules have not been issued, it is highly uncertain what the potential impact such modified or new laws and regulations will have on the Company’s daily business operation, the ability to accept foreign investments and list on a U.S. exchange. Any such changes could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and could cause the value of our securities to significantly decline or become worthless.

On February 17, 2023, with the approval of the State Council, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which will come into effect on March 31, 2023. Pursuant to the Trial Measures, (i) domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following their submission of initial public offerings or listing applications. If a domestic company fails to complete the required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings and fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines; (ii) if the issuer meets both of the following criteria, the overseas offering and listing conducted by such issuer shall be deemed an indirect overseas offering and listing by a PRC domestic company: (A) 50% or more of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year were derived from PRC domestic companies; and (B) the majority of the issuer’s business activities are carried out in mainland China, or its main place(s) of business are located in mainland China, or the majority of its senior management team in charge of its business operations and management are PRC citizens or have their usual place(s) of residence located in mainland China; and (C) where a PRC domestic company is seeking an indirect overseas offering and listing in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and where an issuer makes an application for an initial public offering or listing in an overseas market, the issuer shall submit filings with the CSRC within three business days after such application is submitted.

Based on the above mentioned, given that the operating income, total profit, total assets or net assets of the Company were not derived from PRC domestic companies, the majority of the Company’s business activities are not carried out in mainland China, its main place of business is located in Hong Kong and the majority of its senior management team in charge of its business operations and management are PRC citizens or have their usual place(s) of residence located in mainland China, this offering shall not be deemed as a domestic enterprise that indirectly offer or list securities on an overseas stock exchange, nor does it requires filing or approvals from the CSRC. Further, as of the date of this prospectus, in the opinion of our Hong Kong legal counsel, Robertsons, we are not required to obtain permission from any Hong Kong authorities to issue our Ordinary Shares to investors; and in the opinion of our PRC legal counsel, Guangdong Wesley Law Firm, we are not subject to permission requirements from the CSRC, the CAC or any other entity that is required to approve of our Operating Subsidiaries’ operations and offer our securities being registered to foreign investors. However, there can be no assurance that the relevant PRC governmental authorities, including the CSRC, would reach the same conclusion as us, or that the CSRC or any other PRC governmental authorities would not promulgate new rules or new interpretation of current rules (with retrospective effect) to require us to obtain CSRC or other PRC governmental approvals for this offering. If we or our Operating Subsidiaries inadvertently conclude that such approvals are not required, our ability to offer or continue to offer our Ordinary Shares to investors could be significantly limited or completed hindered, which could cause the value of our Ordinary Shares to significantly decline or become worthless. Our Group may also face sanctions by the CSRC, the CAC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operations in China, delay or restrict the repatriation of the proceeds from this offering into China or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities.

The Holding Foreign Companies Accountable Act, or HFCA Act, was enacted on December 18, 2020. The HFCA Act states that if the SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the Public Company Accounting Oversight Board of the United States (the “ PCAOB”) for three consecutive years beginning in 2021, the SEC shall prohibit the company’s shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States. Our auditor, JP Centurion & Partners PLT, the independent registered public accounting firm that issues the audit report included in this prospectus, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess JP Centurion & Partners PLT’s compliance with applicable professional standards. JP Centurion & Partners PLT is headquartered in Malaysia and has been inspected by the PCAOB on a regular basis, with the last inspection in 2020. Therefore, we believe that, as of the date of this prospectus, our auditor is not subject to the PCAOB determinations. See “Risk Factors — Risks Related to Our Securities and this Offering — Our Ordinary Shares may be prohibited from being traded on a national exchange under the HFCA Act if the PCAOB is unable to inspect our auditors for three consecutive years beginning in 2021” on page 28. On August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People’s Republic of China, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong completely, consistent with U.S law. It includes three provisions that, if abided by, would grant the PCAOB complete access for the first time: (i) the PCAOB has sole discretion to select the firms, audit engagements and potential violations it inspects and investigates – without consultation with, nor input from, Chinese authorities; (ii) procedures are in place for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; and (iii) the PCAOB has direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates. On December 15, 2022, the PCAOB announced that it has completed a test inspection of two selected auditing firms in mainland China and Hong Kong and has voted to vacate its previous Determination Report, which concluded in December 2021 that the PCAOB could not inspect or investigate completely registered public accounting firms based in mainland China or Hong Kong. On December 23, 2022 the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”) was enacted, which amended the HFCAA by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three and such act was signed into law on December 29, 2022. However, if in the future the PCAOB is prohibited from conducting complete inspections and investigations of PCAOB-registered public accounting firms in mainland China and Hong Kong, then the companies audited by those registered public accounting firms could be subject to a trading prohibition on U.S. markets pursuant to the Holding Foreign Companies Accountable Act. There can be no assurance that China will abide by the Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People’s Republic of China, and that on-site inspections and investigations of firms headquartered in mainland China and Hong Kong will occur and allow for full and timely access to information.

The Company holds all of the equity interests in its Hong Kong subsidiaries through subsidiaries incorporated in the British Virgin Islands, or BVI. As we have a direct equity ownership structure, we do not have any agreement or contract between our Company and any of its subsidiaries that are typically seen in a variable interest entity structure. Within our direct equity ownership structure, funds from foreign investors can be directly transferred to our Hong Kong subsidiaries by way of capital injection or in the form of a shareholder loan from the Company following this offering. As a holding company, we may rely on dividends and other distributions on equity paid by our Operating Subsidiaries for our cash and financing requirements. We are permitted under the laws of the Cayman Islands and our memorandum and articles of association (as amended from time to time) to provide funding to our Operating Subsidiaries incorporated in Hong Kong through loans and/or capital contributions. Our Operating Subsidiaries are permitted under the laws of Hong Kong to issue cash dividends to us without limitation on the size of such dividends. However, if any of our Operating Subsidiaries incurs debt on its own behalf, the instruments governing such debt may restrict its ability to pay dividends. As of the date of this prospectus, our Operating Subsidiaries have not encountered difficulties or limitations with respect to their respective abilities to transfer cash between each other. They do not maintain formal cash management policies or procedures with respect to the size or means of such transfers. There can be no assurance that the PRC government will not restrict or prohibit the flow of cash in or out of Hong Kong. Until recently, we previously had not declared or paid any dividends or made any transfers of assets among our Operating Subsidiaries or us. On June 27, 2022, however, we approved, declared and distributed a special dividend of HK$22 million (approximately US$2.8 million) to our shareholders. This special dividend distributed retained profits accumulated from prior years and was paid to offset the amount due from related parties. Please refer to the financial statements of Healthy Green Group Holding Limited including “Note 17 – Dividend” on page F-19 for further details. Apart from this special dividend distribution, we intend to retain all available funds and future earnings, if any, for operation and business development and do not anticipate declaring or paying any dividends in the foreseeable future. For additional information, see “Dividends and Dividend Policy,” “Summary Financial Data” and “Consolidated Statements of Changes in Shareholders’ Equity” in the audited financial statements as of and for the year ended December 31, 2022 contained in this prospectus.

Upon completion of this offering, our issued and outstanding shares will consist of 11,375,000 Ordinary Shares, assuming the underwriters do not exercise their over-allotment option to purchase additional Ordinary Shares, or 11,675,000 Ordinary Shares, assuming the over-allotment option is exercised in full. Upon completion of this offering, WKW Investment and CFT Investment (the “Controlling Shareholders”), will be the beneficial owners of an aggregate of 6,861,563 Ordinary Shares and 1,632,187 Ordinary Shares, respectively, which will represent 60.32% and 14.35%, respectively, of the then total issued and outstanding Ordinary Shares assuming that the underwriters do not exercise their over-allotment option, 58.77% and 13.98%, respectively, of the total voting power, assuming that the over-allotment option is exercised in full. As a result, we will be a “controlled company” under NYSE American Company Guide Section 801(a) and, therefore, eligible for certain exemptions from the corporate governance requirements of the NYSE American listing rules. If we cease to be a foreign private issuer, we intend to rely on these exemptions. Furthermore, the Controlling Shareholders will be able to exert significant control over our management and affairs, including approval of significant corporate transactions. For additional information, see “Risk Factors — Risks Related to Our Securities and this Offering — Our Controlling Shareholders have substantial influence over the Company.”

⁽¹⁾ Assumes the initial public offering price of US$6.50 per share (the midpoint of the price range set forth on the cover page of this prospectus).

⁽²⁾ We have agreed to pay the underwriters a discount/commission equal to 7.5% of the initial offering price. For a description of the other compensation to be received by the underwriters, see “Underwriting” beginning on page 95.

⁽³⁾ Excludes fees and expenses payable to the underwriters. See “Underwriting – Discounts, Commission and Expenses” on page 95.

⁽⁴⁾ Assumes that the underwriters do not exercise any portion of their over-allotment option.

We have granted the underwriters an option, exercisable from time to time, in whole or in part, to purchase up to 300,000 additional Ordinary Shares from us at the initial public offering price, less underwriting discounts and commissions, within 45 days from the date of this prospectus to cover over-allotments, if any. If the underwriters exercise the option in full, the total underwriting discounts payable will be US$1,121,250, and the total proceeds to us, before expenses, will be US$13,828,750.

This offering is being conducted on a firm commitment basis. If we complete this offering, net proceeds will be delivered to us on the closing date. The underwriters expect to deliver the Ordinary Shares to the purchasers against payment therefor on or about [●], 2023.

Neither the United States Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

You should not assume that the information contained in the registration statement of which this prospectus is a part is accurate as of any date other than the date hereof, regardless of the time of delivery of this prospectus or of any sale of the Ordinary Shares being registered in the registration statement of which this prospectus forms a part.

No dealer, salesperson or any other person is authorized to give any information or make any representations in connection with this offering other than those contained in this prospectus, and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or a solicitation of an offer to buy any securities by anyone in any jurisdiction in which the offer or solicitation is not authorized or is unlawful.

EF HUTTON

division of Benchmark Investments, LLC

The date of this prospectus is [●], 2023

TABLE OF CONTENTS

Until           , 2023 (the 25th day after the date of this prospectus), all dealers that effect transactions in these Ordinary Shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

ABOUT THIS PROSPECTUS

Neither we nor any of the underwriters have authorized anyone to provide you with any information or to make any representations other than as contained in this prospectus or in any related free writing prospectus. Neither we nor the underwriters take responsibility for, nor provide any assurance about the reliability of, any information that others may give you. This prospectus is an offer to sell only the securities offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of the securities. Our business, financial condition, results of operations and prospects may have changed since that date.

For investors outside the United States: neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction, other than the United States, where action for that purpose is required. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the Ordinary Shares and the distribution of this prospectus outside the United States.

We obtained statistical data, market data and other industry data and forecasts used in this prospectus from market research, publicly available information and industry publications. While we believe that the statistical data, industry data, forecasts and market research are reliable, we have not independently verified the data.

PRESENTATION OF FINANCIAL INFORMATION

Basis of Presentation

Unless otherwise indicated, all financial information contained in this prospectus is prepared and presented in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP” or “GAAP”).

Certain amounts, percentages and other figures included in this prospectus have been subject to rounding adjustments. Accordingly, amounts, percentages and other figures shown as totals in certain tables or charts may not be the arithmetic aggregation of those that precede them, and amounts and figures expressed as percentages in the text may not total 100% or, when aggregated, may not be the arithmetic aggregation of the percentages that precede them.

Financial Information in U.S. Dollars

Our reporting currency is the Hong Kong dollar. This prospectus also contains translations of certain foreign currency amounts into U.S. dollars for the convenience of the reader. Unless otherwise stated, all translations of Hong Kong dollars into U.S. dollars were made at HK$7.8015 to US$1.00, the exchange rate set forth in the H10 statistical release of the Federal Reserve Board on December 30, 2022. We make no representation that the Hong Kong dollar or U.S. dollar amounts referred to in this prospectus could have been or could be converted into U.S. dollars or Hong Kong dollars, as the case may be, at any particular rate or at all.

MARKET AND INDUSTRY DATA

This prospectus contains certain data and information that we obtained from the Frost & Sullivan Report and various other publications. All market and industry data used in this prospectus involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Although we believe the information from industry publications and other third-party sources included in this prospectus is reliable, such information is inherently imprecise. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that relate to our current expectations and views of future events. These forward-looking statements are contained principally in the sections titled “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Industry Overview” and “Business.” These statements relate to events that involve known and unknown risks, uncertainties and other factors, including those listed under “Risk Factors,” which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, these forward-looking statements can be identified by words or phrases such as “believe,” “plan,” “expect,” “intend,” “should,” “seek,” “estimate,” “will,” “aim” and “anticipate” or other similar expressions, but these are not the exclusive means of identifying such statements. All statements other than statements of historical facts included in this document, including those regarding future financial position and results, business strategy, plans and objectives of management for future operations (including development plans and dividends) and statements on future industry growth are forward-looking statements. In addition, we and our representatives may from time to time make other oral or written statements that are forward-looking statements, including in our periodic reports that we will file with the SEC, other information sent to our shareholders and other written materials.

These forward-looking statements are subject to risks, uncertainties and assumptions, certain of which are beyond our control. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the risk factors set forth in “Risk Factors” and the following:

The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results or performance may be materially different from what we expect.

CONVENTIONS THAT APPLY TO THIS PROSPECTUS

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that may be important to you, and we urge you to read this entire prospectus carefully, including the “Risk Factors,” “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and our consolidated financial statements and notes to those statements, included elsewhere in this prospectus, before deciding to invest in our Ordinary Shares. This prospectus includes forward-looking statements that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements.”

Overview

We are a Hong Kong based retailer principally engaged in the sale of natural and organic food under our “Greendotdot” brand. Our Group’s history can be traced back to 1999 when Mr. Wong and Ms. Cheuk started the business of marketing natural and organic foods. The same year, we launched our first retail store with the objective to introduce quality products from local and overseas suppliers to our customers. Over the years, we have been building our “Greendotdot” brand by sourcing, procuring, marketing and selling a wide variety of quality products, which can be broadly classified into (i) packaged foods; (ii) fresh foods; (iii) frozen foods; and (iv) other products such as honey, beverages, edible oils, seasonings and other non-food items.

We offer a diversified portfolio of over 600 products sourced from over 134 suppliers, which we market through established sales channels including 22 retail stores in Hong Kong under our brand “Greendotdot” as of December 31, 2022. The retail stores are strategically located in Metrorail stations, residential areas, or shopping complexes, which are prime locations with high pedestrian traffic. Other established sales channels include our online sales platforms, exhibitions and through supermarkets and department stores, and wholesale sales to bulk-purchase customers.

According to the Frost & Sullivan Report, our Group ranked as the second largest natural and organic food retail chain in Hong Kong in terms of our revenue, translating to a market share of approximately 7.9% in the natural and organic food market in Hong Kong in 2021. For the years ended December 31, 2021 and 2022, our Group’s revenue amounted to approximately HK$159,546,000 (US$20,527,000) and HK$161,453,000 (US$20,729,000), respectively. Our net profit was approximately HK$4,013,000 (US$516,000) and HK$5,880,000 (US$755,000) for the respective years.

Investors in this offering are buying shares of the Cayman Islands company whereas all of our operations are conducted through our Operating Subsidiaries. At no time will the Company’s shareholders directly own shares of the Operating Subsidiaries.

Our Competitive Strengths

Established brand recognition and market position in the growing natural and organic food market

We believe we have a proven business track record and have established strong brand recognition. Since our establishment in 1999, our efforts have led to the recognition of our brand “Greendotdot” as a reputable brand in the market. We believe that the brand image of “Greendotdot” is associated by the public with quality and reliable natural and organic products, which we further believe has reinforced our customers’ confidence in our products. We believe our brand reputation and influence differentiate us from our competitors and have led to our popularity and customer loyalty.

With local consumers’ increasing awareness of the benefits of a healthy diet and knowledge about natural and organic foods, we believe the natural and organic food market will continue to expand. According to the Frost & Sullivan Report, the natural and organic food market in Hong Kong is expected to grow at a CAGR of approximately 13.7% and reach approximately HK$3.8118 billion by the end of 2026. With our brand recognition and customers’ confidence in our products, we believe it will place us in a favorable position to further capture demand in the growing market.

Our ability to identify and vet quality suppliers and our established relationships with existing suppliers

Our suppliers consist of brand owners and manufacturers throughout the world, as well as local suppliers in Hong Kong. In order to enrich our product range and product portfolio, we maintain relationships with our existing suppliers and proactively identify new suppliers by regularly attending international trade fairs, exhibitions and conventions, which provides us access to extensive procurement networks and diversified supplier contacts.

Our Group has implemented a stringent vetting process to assess the suitability and quality of our suppliers, and we conduct business reviews and evaluations of our suppliers on a continual basis. As of December 31, 2022, we had over 134 suppliers on our approved suppliers list. Given that we have developed and maintained a diverse supplier base on our internal list of approved suppliers, we are able to predict changes in product trends effectively and capture opportunities to source a wide variety of quality and distinctive products originating from various countries. The relationships we maintain with our suppliers enable our Group to create and foster stable, long-term relationships with our suppliers which contribute to the success of our Group.

Established sales channels supported by effective marketing and promotion initiatives

We have a diversified portfolio of over 600 products available, and we have established various sales channels to ensure our products reach an extensive customer base. Our sales channels include (i) retail sales via our retail stores in Hong Kong, online sales platforms and exhibitions, and (ii) wholesale sales to bulk-purchase customers. As of December 31, 2022, we operated a chain of 22 retail stores in Hong Kong under our brand “Greendotdot,” strategically located in Metrorail stations, residential areas or shopping complexes, which are prime locations with high pedestrian traffic.

In addition, we also implement multi-dimensional marketing and promotional initiatives to target a large customer base and to deepen market penetration for our products. We closely follow market information and formulate marketing and promotional strategies in order to adapt to fast-changing trends in the market and customer tastes. Our marketing and promotional initiatives include placing advertisements through various media channels, including newspaper, the internet and social media. We also adopt a variety of other advertising methods, including direct mailing, joint promotions with other brands, in-store promotions and promotions at exhibitions. Moreover, we provide training for our sales personnel to ensure they are well-equipped regarding the relevant features of and health information about our products to effectively promote them to our customers.

We believe our established sales channels, supported by our effective marketing and promotional initiatives, provide us with a solid foundation to further increase the market share of our products, strengthen our brand recognition and enhance our ability to compete in the market.

Experienced management team with a proven track record

The members of our senior management team have more than 20 years of experience in the natural and organic food industry. Our Directors believe that our continued growth is attributable to the unique vision regarding market trends and vast knowledge on the latest product information possessed by our experienced management team, which enable our Group to comprehend changing product trends effectively and continually. Our management team is responsible for overseeing different aspects of our operations including procurement, warehouse and transportation management, operation and marketing. The biographies of our Directors and senior management are included herein under “Management – Executive Officers and Directors.”

Our growth strategy

Our Group has formulated the following business strategies to further enhance our market position in the natural and organic food industry and to continue our business expansion:

Transfers of Cash to and from Our Subsidiaries

Until recently, we had not declared or paid any dividends or made any transfers of assets among us or our Operating Subsidiaries. On June 27, 2022, however, we approved, declared and distributed a special dividend of HK$22 million (approximately US$2.8 million) to our shareholders. This special dividend was mainly distributed from retained profits accumulated from prior years and was paid to offset the amount due from related parties.

We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future. Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, contractual requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions contained in any future financing instruments.

We are permitted under the laws of the Cayman Islands to provide funding to our Operating Subsidiaries through loans and/or capital contributions without restriction on the amount of the funds loaned or contributed.

Cayman Islands. Subject to Hong Kong law, the Companies Act and our Memorandum and Articles of Association, our Company in general meeting may declare dividends in any currency, but no dividends shall be declared in excess of the amount recommended by our board of directors. Subject to a solvency test, as prescribed in the Companies Act, and the provisions, if any, of the memorandum and articles of association of an exempted company incorporated in the Cayman Islands, an exempted company incorporated in the Cayman Islands may pay dividends and distributions out of its share premium account. In addition, based upon English case law that is likely to be persuasive in the Cayman Islands, dividends may be paid out of profits.

Hong Kong. Under Hong Kong law, dividends may only be paid out of distributable profits (that is, accumulated realized profits less accumulated realized losses) or other distributable reserves. Dividends cannot be paid out of share capital. There are no restrictions or limitations under the laws of Hong Kong imposed on the conversion of HK dollars into foreign currencies and the remittance of currencies out of Hong Kong, nor is there any restriction on foreign exchange to transfer cash between the Company and its subsidiaries, across borders and to U.S. investors, nor are there any restrictions or limitations on distributing earnings from our business and subsidiaries to the Company and U.S. investors. Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us.

For more information, see “Dividends and Dividend Policy,” “Risk Factors” and “Summary Financial Data” and “Consolidated Statements of Changes in Shareholders’ Equity” in the audited financial statements as of and for the year ended December 31, 2022 contained in this prospectus.

Risks and Challenges

Investing in our Ordinary Shares involves risks. The risks summarized below are qualified by reference to “Risk Factors” beginning on page 19 of this prospectus, which you should carefully consider before making a decision to purchase Ordinary Shares. If any of these risks actually occurs, our business, financial condition or results of operations would likely be materially adversely affected. In such case, the trading price of our Ordinary Shares would likely decline, and you may lose all or part of your investment.

A summary of these risks include but are not limited to the following:

Risks Relating to Our Business

Risks and uncertainties relating to our business, beginning on page 19 of this prospectus, include but are not limited to the following:

Risks Relating to Our Industry

Risks and uncertainties relating to our industry, beginning on page 24 of this prospectus, include but are not limited to the following:

Risks Relating to Doing Business in the Jurisdictions in which our Operating Subsidiaries Operate

Risks and uncertainties relating to doing business in the jurisdiction in which our Operating Subsidiaries operate, beginning on page 25 of this prospectus, include but are not limited to the following:

Risks Related to our Securities and this Offering:

Risks and uncertainties relating to our securities and this offering, beginning on page 28 of this prospectus, include but are not limited to the following:

Holding Foreign Companies Accountable Act (the “HFCA Act”)

The HFCA Act was enacted on December 18, 2020. The HFCA Act states if the SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit the company’s shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non- inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and trading prohibitions described above.

On June 22, 2021, the U.S. Senate passed a bill which, if passed by the U.S. House of Representatives and signed into law, would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two years.

On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.

On December 16, 2021, the PCAOB announced the PCAOB HFCA Act determinations (the “PCAOB determinations”) relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in mainland China of the PRC or Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in the PRC or Hong Kong.

Our auditor, JP Centurion & Partners PLT, the independent registered public accounting firm that issues the audit report included in this prospectus, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess JP Centurion & Partners PLT’s compliance with applicable professional standards. JP Centurion & Partners PLT is headquartered in Malaysia and has been inspected by the PCAOB on a regular basis, with the last inspection in 2020. Therefore, we believe that, as of the date of this prospectus, our auditor is not subject to the PCAOB determinations. See “Risk Factors — Risks Related to Our Securities and this Offering — Our Ordinary Shares may be prohibited from being traded on a national exchange under the HFCA Act if the PCAOB is unable to inspect our auditors for three consecutive years beginning in 2021” on page 28. The delisting of our Ordinary Shares, or the threat of their being delisted, may materially and adversely affect the value of your investment. We cannot assure you whether the NYSE American or other regulatory authorities will apply additional or more stringent criteria to us. Such uncertainty could cause the market price of our Ordinary Shares to be materially and adversely affected.

On August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People’s Republic of China, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong completely, consistent with U.S law. It includes three provisions that, if abided by, would grant the PCAOB complete access for the first time: (i) the PCAOB has sole discretion to select the firms, audit engagements and potential violations it inspects and investigates – without consultation with, or input from, Chinese authorities; (ii) procedures are in place for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; and (iii) the PCAOB has direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates.

On December 15, 2022, the PCAOB announced that it has completed a test inspection of two selected auditing firms in mainland China and Hong Kong and has voted to vacate its previous Determination Report, which concluded in December 2021 that the PCAOB could not inspect or investigate completely registered public accounting firms based in mainland China or Hong Kong. On December 23, 2022, the AHFCAA was enacted, which amended the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three and such act was signed into law on December 29, 2022. However, if in the future the PCAOB is prohibited from conducting complete inspections and investigations of PCAOB-registered public accounting firms in mainland China and Hong Kong, then the companies audited by those registered public accounting firms could be subject to a trading prohibition on U.S. markets pursuant to the Holding Foreign Companies Accountable Act.

Recent Regulatory Development in the PRC

Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking down on certain activities in the securities market, enhancing supervision over Chinese-based companies listed overseas using a variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding efforts in anti-monopoly enforcement.

For example, on June 10, 2021, the Standing Committee of the National People’s Congress enacted the PRC Data Security Law, which took effect on September 1, 2021. The law requires data collection to be conducted in a legitimate and proper manner and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.

On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on certain activities in the securities markets to promote the high-quality development of the capital markets, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over Chinese-based companies listed overseas and to establish and improve the system of extraterritorial application of the PRC securities laws.

On August 20, 2021, the 30th meeting of the Standing Committee of the 13th National People’s Congress voted and passed the “Personal Information Protection Law of the People’s Republic of China,” or the “PRC Personal Information Protection Law,” which became effective on November 1, 2021. The PRC Personal Information Protection Law applies to the processing of personal information of natural persons within the territory of China that is carried out outside of China where (i) such processing is for the purpose of providing products or services for natural persons within China; (ii) such processing is to analyze or evaluate the behavior of natural persons within China; or (iii) there are any other circumstances stipulated by related laws and administrative regulations.

On December 28, 2021, the CAC jointly with the relevant authorities formally published Measures for Cybersecurity Review (2021) which took effect on February 15, 2022, replacing the former Measures for Cybersecurity Review (2020) issued on July 10, 2021. Measures for Cybersecurity Review (2021) stipulates that operators of critical information infrastructure purchasing network products and services, and online platform operators (together with the operators of critical information infrastructure, the “Operators”) carrying out data processing activities that affect or may affect national security shall conduct a cybersecurity review, and any online platform operator who controls more than one million users’ personal information must undergo a cybersecurity review by the cybersecurity review office if it seeks to be listed in a foreign country.

Our Operating Subsidiaries may collect and store certain data (including certain personal information) from our clients, who may be PRC individuals, in connection with our business and operations and for “Know Your Customer” purposes (to combat money laundering). Given that (i) our Operating Subsidiaries are incorporated in Hong Kong or the BVI and are located in Hong Kong; (ii) we have no subsidiary, VIE structure or any direct operations in mainland China; and (iii) pursuant to the Basic Law of the Hong Kong Special Administrative Region (the “Basic Law”), which is a national law of the PRC and the constitutional document for Hong Kong, national laws of the PRC shall not be applied in Hong Kong, except for those listed in Annex III of the Basic Law (which is confined to laws relating to defense and foreign affairs, as well as other matters outside the autonomy of Hong Kong), we do not currently expect the Measures for Cybersecurity Review (2021), the PRC Personal Information Protection Law to have an impact on our business, operations or this offering, as we do not believe that any of our Operating Subsidiaries would be deemed to be an “Operator” that is required to file for cybersecurity review before listing in the United States because (i) our Operating Subsidiaries were incorporated in Hong Kong and the British Virgin Islands and operate in Hong Kong without any subsidiary or variable interest entity (“VIE”) structure in mainland China and each of the Measures for Cybersecurity Review (2021) and the PRC Personal Information Protection Law remains unclear whether it shall be applied to a company based in Hong Kong; (ii) as of date of this prospectus, our Operating Subsidiaries have in aggregate collected and stored personal information of less than one million users; (iii) all of the data our Operating Subsidiaries have collected is stored in servers located in Hong Kong; and (iv) as of the date of this prospectus, none of our Operating Subsidiaries have been informed by any PRC governmental authority of any requirement that it files for a cybersecurity review or a CSRC review.

On February 17, 2023, with the approval of the State Council, the China Securities Regulatory Commission (“CSRC”) promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the Trial Measures, (i) domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following their submission of initial public offerings or listing applications. If a domestic company fails to complete the required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings and fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines; (ii) if the issuer meets both of the following criteria, the overseas offering and listing conducted by such issuer shall be deemed an indirect overseas offering and listing by a PRC domestic company: (A) 50% or more of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year were derived from PRC domestic companies; and (B) the majority of the issuer’s business activities are carried out in mainland China, or its main place(s) of business are located in mainland China, or the majority of its senior management team in charge of its business operations and management are PRC citizens or have their usual place(s) of residence located in mainland China; and (C) where a PRC domestic company is seeking an indirect overseas offering and listing in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and where an issuer makes an application for an initial public offering or listing in an overseas market, the issuer shall submit filings with the CSRC within three business days after such application is submitted.

As of the date of this prospectus, in the opinion of our Hong Kong legal counsel, Robertsons, we are not required to obtain permission from any Hong Kong authorities to issue our Ordinary Shares to investors; and in the opinion of our PRC legal counsel, Guangdong Wesley Law Firm, we are not subject to permission requirements from the CSRC, the CAC or any other entity that is required to approve of our Operating Subsidiaries’ operations and offer our securities being registered to foreign investors. However, there can be no assurance that the relevant PRC governmental authorities, including the CSRC, would reach the same conclusion as us, or that the CSRC or any other PRC governmental authorities would not promulgate new rules or new interpretation of current rules (with retrospective effect) to require us to obtain CSRC or other PRC governmental approvals for this offering. If we or our Operating Subsidiaries inadvertently conclude that such approvals are not required, our ability to offer or continue to offer our Ordinary Shares to investors could be significantly limited or completed hindered, which could cause the value of our Ordinary Shares to significantly decline or become worthless. Our Group may also face sanctions by the CSRC, the CAC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operations in China, delay or restrict the repatriation of the proceeds from this offering into China or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities.

However, since these statements and regulatory actions are new, it is highly uncertain how soon the legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any. It is also highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business operations of our Operating Subsidiaries, their respective abilities to accept foreign investments and the listing of our Ordinary Shares on U.S. or other foreign exchanges. There remains significant uncertainty in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations. If the Trial Measures become applicable to our Operating Subsidiaries, if any of our Operating Subsidiaries is deemed to be an “Operator” or if the Measures for Cybersecurity Review (2021) or the PRC Personal Information Protection Law becomes applicable to our Operating Subsidiaries, the business operation of our Operating Subsidiaries and the listing of our Ordinary Shares in the United States could be subject to the CAC’s cybersecurity review or CSRC’s review in the future. If the applicable laws, regulations or interpretations change, and our Operating Subsidiaries become subject to the review of CAC or CSRC, we cannot assure you that our Operating Subsidiaries will be able to comply with the regulatory requirements in all respects, and our current practice of collecting and processing personal information may be ordered to be rectified or terminated by regulatory authorities. If our Operating Subsidiaries fail to receive or maintain such permissions or if the required approvals are denied, our Operating Subsidiaries may become subject to fines and other penalties which may have a material adverse effect on our business, operations and financial condition and may hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless.

Additionally, due to long arm provisions under the current PRC laws and regulations, there remains regulatory uncertainty with respect to the implementation and interpretation of laws in China. We are also subject to the risks of uncertainty about any future actions the Chinese government or authorities in Hong Kong may take in this regard.

Should the Chinese government choose to exercise significant oversight and discretion over the conduct of our Operating Subsidiaries’ business, they may intervene in or influence our operations. Such governmental actions:

We have not received or been denied such permission by any PRC authorities. We are also currently not required to obtain any pre-approval from Chinese authorities (including those in Hong Kong) to list on a U.S. stock exchange, including the NYSE American. Given the current PRC regulatory environment, it is uncertain when and whether we will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. As of the date of this prospectus, we have not received any inquiry, notice, warning, sanctions or regulatory objection to this offering from the CSRC or other PRC governmental authorities. However, if we are required to obtain approval in the future and are denied permission from Chinese authorities to list on a U.S. exchange, we will not be able to list on a U.S. exchange, which would materially affect the interest of our investors. Further, if we were required to obtain additional approvals to conduct our Operating Subsidiaries’ operations and if we incorrectly conclude that such permissions or approvals are not required, and subsequently fail to receive or maintain such permissions or if the required approvals are denied, our Operating Subsidiaries may be required to cease their business operations until such permissions or approvals are obtained and may, if they continue to operate without such permissions or approvals, become subject to fines and other penalties, limit our ability to pay dividends outside of China, delay or restrict the repatriation of the proceeds from this offering into China or take other actions which may have a material adverse effect on our Operating Subsidiaries’ business, operations and financial condition and may hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless. See “Risk Factors – Risks Relating to Doing Business in the Jurisdictions in which our Operating Subsidiaries Operate” on page 25 of this prospectus.

Corporate Information

We were incorporated in the Cayman Islands on December 24, 2018. Our registered office in the Cayman Islands is at Genesis Building, 5/F, Genesis Close, PO Box 446, Cayman Islands, KY1-1106. Our principal executive office is at Flat 2-3, 4/F, Join-In Hang Sing Centre, 2-16 Kwai Fung Crescent, Kwai Chung, New Territories, Hong Kong. Our telephone number is +852 3181 4488. Our website address is www.greendotdot.com. The information contained on our website does not form part of this prospectus. Our agent for service of process in the United States is Cogency Global Inc., 122 East 42nd Street, 18th Floor, New York, New York 10168.

Because we are incorporated under the laws of the Cayman Islands, you may encounter difficulties protecting your interests as a shareholder, and your ability to protect your rights through the U.S. federal court system may be limited. Please refer to the sections titled “Risk Factors” and “Enforceability of Civil Liabilities” for more information.

Implications of Being a “Controlled Company”

Upon completion of this offering, WKW Investment and CFT Investment (the “Controlling Shareholders”), will be the beneficial owners of an aggregate of 6,861,563. Ordinary Shares and 1,632,187 Ordinary Shares, respectively, which will represent 60.32% and 14.35%, respectively, of the then total issued and outstanding Ordinary Shares assuming that the underwriters do not exercise their over-allotment option, 58.77% and 13.98%, respectively, of the total voting power, assuming that the over-allotment option is exercised in full. As a result, we will be a “controlled company” within the meaning of the NYSE American Company Guide and, therefore, eligible for certain exemptions from the corporate governance requirements of the NYSE American. If we cease to be a foreign private issuer, we intend to rely on these exemptions. In addition, our Controlling Shareholders will be able to exert significant control over our management and affairs, including approval of significant corporate transactions.

Implications of Our Being an Emerging Growth Company

As a company with less than US$1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include:

We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the fifth anniversary of the completion of this offering occurs; (ii) the last day of the fiscal year in which we have total annual gross revenue of at least US$1.235 billion; (iii) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which means the market value of our Ordinary Shares that are held by non-affiliates exceeds US$700.0 million as of the prior June 30; and (iv) the date on which we have issued more than US$1.0 billion in non-convertible debt during the prior three-year period. We may choose to take advantage of some, but not all, of the available exemptions. We have included two years and ten months of selected financial data in this prospectus in reliance on the first exemption described above. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock.

Implications of Our Being a Foreign Private Issuer

Upon completion of this offering, we will report under the Exchange Act as a non-U.S. company with foreign private issuer status. Even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act, we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:

Both foreign private issuers and emerging growth companies are also exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company but remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of companies that are neither emerging growth companies nor foreign private issuers.

In addition, as a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that may differ significantly from the NYSE American Company Guide. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the corporate governance listing requirements of the NYSE American Company Guide. Following this offering, we will rely on home country practice to be exempted from certain of the corporate governance requirements of the NYSE American Company Guide, such that a majority of the directors on our board of directors are not required to be independent directors, our audit committee is not required to have a minimum of three members and neither our compensation committee nor our nomination committee is required to be comprised entirely of independent directors.

CORPORATE STRUCTURE

The chart below sets out our corporate structure as of the date of this prospectus.

A description of our principal subsidiaries is set out below.

Organic Gardens was formed in Hong Kong as a limited liability company on March 3, 1999. Organic Gardens principally engages in the wholesale and trading of natural and organic foods and the operation of the Food Factory during the fiscal years ended December 31, 2021 and 2022 and a warehouse in Hong Kong.

GDD Hong Kong was incorporated in Hong Kong as a limited liability company on April 14, 2000. GDD Hong Kong principally engages in retail (through retail outlets and online) of natural and organic foods in Hong Kong.

Linden Tree was formed in Hong Kong as a limited liability company on May 20, 2013. Linden Tree principally serves as the trademark holding company of our Group.

The Offering

Unless otherwise stated, all information in this prospectus assumes no exercise of the underwriter’s over-allotment option to purchase additional Ordinary Shares.

SUMMARY FINANCIAL DATA

You should read the following summary financial data together with our financial statements and the related notes appearing at the end of this prospectus, “Selected Consolidated Financial and Other Data,” “Capitalization” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We have derived the financial data for the years ended December 31, 2022 and 2021 from our audited financial statements included in this prospectus.

Results of Operations Data:

Balance Sheet Data: 

RISK FACTORS

Investing in our Ordinary Shares is highly speculative and involves a significant degree of risk. You should carefully consider the following risks, as well as other information contained in this prospectus, before making an investment in our Company. The risks discussed below could materially and adversely affect our business, prospects, financial condition, results of operations, cash flows, ability to pay dividends and the trading price of our Ordinary Shares. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, prospects, financial condition, results of operations, cash flows and ability to pay dividends, and you may lose all or part of your investment.

RISKS RELATING TO OUR BUSINESS

Our business depends significantly on the market recognition of our “Greendotdot” brand.

We believe that our business growth depends significantly on our brand name of “Greendotdot” and the reputation for trustworthy and quality products associated with our brand. We believe that the market recognition of our brand plays a vital role in influencing consumer decisions in purchasing our products, and our continued growth will depend largely on our ability to protect and enhance the value of our brand. We have invested significant effort and resources to establish brand recognition through various channels and have received various awards and recognitions. As we continue to expand our sales network, our ability to market, protect and enhance our brand will remain critical to the success of our business. Any incident that erodes consumer trust in our brand could significantly reduce our brand value and hence affect our business, results of operations and prospects.

Our quality control system to detect defective products may fail and render the products we supply susceptible to food safety issues.

Maintaining the quality and food safety of our products is critical to our operations. Our quality control measures on food safety may not be effective at all times, and/or we may be subject to product recall or product liability claims due to deficiencies in product quality, product contamination or other food safety issues. Any failure in our quality control system may lead to our Group being subject to product recalls or product liability claims if our products sold are found to be defective, unfit for consumption or causing illness. There may be circumstances in which our products are rendered unfit for consumption due to food ingredient or product contamination, illegal tampering of products by unauthorized third parties or other problems arising during various stages of production, procurement, transportation or storage processes, where we may be required to recall our products. In the event there are quality or food safety issues relating to our products, we may receive complaints and even be involved in legal actions or proceedings. Additional costs may be incurred, and our results of operations and financial performance may be affected.

Our market share and results of operations could be adversely affected if we are unable to respond effectively to changes in consumer preferences and needs.

As of December 31, 2022, we offered over 600 products in our product portfolio that enables us to attract a diverse range of customers. We may fail to anticipate, identify or respond to changes in consumer preferences and needs on a timely basis, and we may be unable to gain market receptiveness and market share for our products. Consumer preferences and demands for products and brands change from time to time for various reasons, such as the emergence of competitive products and brands that our competitors may be able to introduce that are more appealing to consumers, or a general decrease in demand for certain products sold by us. Our success depends in large part on our customers’ continued perception that food made with high-quality and organic ingredients is worth the prices we charge relative to the lower costs of some of our competitors. Our inability to educate our customers about the quality of our products or their rejection of our pricing approach could result in decreased demand for our products. Any change in consumer preferences could require us to change our pricing, marketing or promotional strategies. Any change in our strategy or any failure to respond effectively to changes in consumer preferences and needs could adversely affect our business and results of operations.

Our success depends on our key management personnel, and our business may be harmed if we lose their services.

Our success depends on the ability and contribution of our key management personnel. Mr. Wong, our Chairman and Executive Director, has approximately 30 years of managerial experience in the catering industry. Ms. Cheuk, our Chief Executive Officer and Executive Director, has approximately 30 years of experience in marketing and management. See “Management” for details.

Our key management personnel possess extensive knowledge of the industry. Since the founding of our Group, our management team has built up a good reputation and established amicable business relationships with our suppliers and customers. In the event that any key management personnel resigns or terminates their employment agreement, we may be unable to recruit eligible new management personnel with comparable industry experience and knowledge in a timely manner or at all. Any failure to attract, retain or motivate these key management personnel may affect our business relationships with our suppliers and customers, and hence affect our results of operations and financial performance.

We are exposed to risks relating to the commercial real estate rental market, including unpredictable and potentially high occupancy costs.

We lease or license all the properties for our retail stores in Hong Kong. We also lease properties for our office and warehouse. As of December 31, 2022, we leased 24 properties for use as retail stores, offices, Food Factory and warehouses in Hong Kong. Accordingly, occupancy costs account for a considerable portion of our operating expenses. For the years ended December 31, 2021 and 2022, our total property rental costs, which included the lease charges and variable rental payments in respect of the leased properties, amounted to approximately HK$17,227,000 (US$2,208,800) and HK$15,806,000 (US$2,029,000), respectively, representing approximately 10.8% and 9.8% of our revenue during the respective periods. Our substantial leased properties expose us to risks, such as increasing our vulnerability to adverse economic conditions, including but not limited to those resulting from COVID-19, and limiting our ability to obtain additional financing and reducing our cash available for other purposes. In addition, we need to compete with other competitors for quality sites in a highly competitive market for retail premises. If we are unable to secure desirable retail store locations or secure renewals of existing leases on commercially reasonable terms, our business, results of operations and ability to implement our growth strategy will be adversely affected. Notwithstanding the outbreak of COVID-19, there has been a positive impact on customers to purchase our products from our retail stores during the pandemic. In trying to achieve a zero COVID policy, the Hong Kong Government had at times imposed certain “dine out” and “dine-in hours” restrictions on the maximum number of persons and times of those who are permitted to dine at a table in a restaurant. Such precautionary measures imposed by the Hong Kong Government have led to a large number of customers avoiding dining out and, as a result, have resulted in many customers purchasing our products for home dining.

The leases for our leased properties typically have an initial term ranging from one to three years. If such lease agreement is not renewed, or is not renewable at a reasonable rate, we will have to close or relocate our retail stores, which would eliminate the sales that the retail stores would have contributed to our revenue during the period of closure and subject us to relocation and other costs. In addition, the revenue and any profit generated at any relocated retail store may be less than the revenue and profit previously generated at the closed retail stores and hence could affect our results of operations.

We currently rely and will continue to rely on third-party outsourcing partners to perform the packaging processes, which exposes us to a number of risks and uncertainties outside our control.

We currently rely on third-party outsourcing partners to perform the packaging process and expect to continue to do so until we locate to a new Food Factory. If our third-party outsourcing partners were to experience delays, disruptions, capacity constraints or quality control problems in the packaging process, product shipments could be delayed, or our retail shops could consequently be affected by having a shortage of certain products. These disruptions would negatively impact our revenues, competitive position and reputation. In addition, our third-party outsourcing partners may be subject to change or our contracts with them terminated in the future, which could result in additional costs and delays in production if a new outsourcing partner cannot be timely replaced on similar or better commercial terms. Further, if we are unable to successfully manage our relationships with our third-party outsourcing partners, the quality of our products may be diminished. Our third-party outsourcing partners could, under some circumstances, decline to accept new orders from or otherwise reduce their business with us. If our third-party outsourcing partners stopped packaging our products for any reason or reduced the packaging capacity, we may be unable to supply our products to our end customers in a timely and comparatively cost-effective basis, which would adversely impact our operations. In addition, we have not entered into long-term contracts with our third-party outsourcing partners. As a result, we are subject to price increases due to availability, and subsequent price volatility, to packaging our products. If our third-party outsourcing partners were to negatively change the pricing and other terms under which they agree to package for us and we were unable to locate a suitable alternative at a reasonable costs and upon reasonable terms, our costs could increase, which could adversely affect our business and results of operations.

Any disruption to the supply of products, food ingredients or packaging materials could adversely affect our results of operations.

Our production requires a stable supply of natural and organic food ingredients and packaging materials. Our ability to ensure consistent quality and maintain our product offerings depends upon our ability to source and procure quality products from reliable sources in accordance with the requisite standards and certifications. In particular, we rely on our suppliers to supply us with food ingredients, such as grains and food powder. Some of the food ingredients we use are imported from overseas countries and may be subject to various regulatory requirements, procedures and import duties. We may experience shortages in the supply of certain food ingredients in the future due to various unforeseeable events including detrimental climate conditions worldwide, such as typhoons, hurricanes, snow storms, heavy rains and droughts, which could materially and adversely affect our production and results of operations. We experienced shipment delays for certain products, as global shipping logistics had at times been affected by the COVID-19 pandemic.

Climate change risk can create food shortages or increases in food costs, which can adversely affect our operations and profitability.

A key part of our Operating Subsidiaries’ business is the supply of quality foods that meet our requirements at prices that remain attractive to us. This means they need to achieve favorable commercial terms with our suppliers and ensure there is an uninterrupted supply chain. If there is an interruption to the food supply or a food shortage on a local or global scale resulting from climate change, including drastic inclement weather conditions, this could reduce the availability of food and increase the pricing of the food chain supplies that we use to run our operations. Extreme weather due to climate change can lead to epidemics as well as business disruptions. Climate change events can result in the disruption of the continued functioning of infrastructures, such as the transportation network and utilities. For example, drought can result in increases in food prices and food shortages. Enterprises are increasingly focused on managing risks arising from climate change and compliance with relevant laws and regulations. As countries worldwide undertake measures to lower greenhouse gas emissions, businesses relating to food production may be increasingly subject to regulatory requirements relating to reduced emissions, including carbon tax and other emission reduction targets. Such new regulations can lead to increased costs of producing food. The inflation in food prices due to the effects of climate changes and increases in fuel and transportation costs may make our food ingredient costs increase significantly. Alternatively, our Operating Subsidiaries may be unwilling or unable to pass these increased costs on to our customers, which would decrease our profit margins. Moreover, our Operating Subsidiaries may lose their competitiveness if the prices of their products increase significantly. In the 12 months ended December 31, 2022, our Operating Subsidiaries have experienced an approximate 3% to 5% increase in the costs of food. In either case, this could have a material adverse effect on our Operating Subsidiaries’ business, results of operations and financial condition.

Our business and operations might be adversely affected by security breaches, including any cybersecurity incidents.

Our Operating Subsidiaries depend on the efficient and uninterrupted operation of our computer and communications systems, and those of their customers and suppliers, which they use for, among other things, sensitive company data, including their intellectual property, financial data and other proprietary business information. While certain of our Operating Subsidiaries’ operations have business continuity and disaster recovery plans and other security measures intended to prevent and minimize the impact of IT-related interruptions, our IT infrastructure and the IT infrastructure of our Operating Subsidiaries’ customers and suppliers are vulnerable to damage from cyberattacks, computer viruses, unauthorized access, electrical failures and natural disasters or other catastrophic events. We could experience failures in our information systems and computer servers, which could result in an interruption of our normal business operations and require substantial expenditure of financial and administrative resources to remedy. System failures, accidents or security breaches can cause interruptions in our operations and can result in a material disruption of our business operations. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur regulatory investigations and redresses, penalties and liabilities, and the development of our business operations could be delayed or otherwise adversely affected.

Even though we carry commercially reasonable business interruption and liability insurance, we might suffer losses as a result of business interruptions that exceed the coverage available under our insurance policies or for which we do not have coverage. For example, the Group is not insured against terrorist attacks or cyberattacks. Any natural disaster or catastrophic event could have a significant negative impact on our Group’s operations and financial results. Moreover, any such event could delay the development of our Group’s business operation.

Our Operating Subsidiaries’ operations may be adversely affected by the disruption of logistics services or poor handling of products by third party logistics service providers.

Our Operating Subsidiaries rely on third party logistics service providers to provide a range of transportation and logistics services, including the delivery of products, some of which are perishable, to our retail stores, warehouse and/or our customers. Any failure to provide on-time delivery or failure to maintain our Operating Subsidiaries’ products in good condition during delivery may have a material adverse impact on our Operating Subsidiaries’ business operations and our reputation. In such event, our Operating Subsidiaries may be unable to seek full recourse against the logistics service providers in default under the terms of the service contracts or enforce in full any judgments obtained.

Significant portions of our inventory are perishable and vulnerable to spoilage and other loss.

Our Operating Subsidiaries’ operations involve the storage and stocking of a wide range of products with limited shelf life, including fresh fruits and vegetables. Due to unexpected material fluctuations or abnormalities in the supply and demand of our products or changes in consumers’ preferences or the introduction of new products in the market, our Operating Subsidiaries may experience decrease in demand and overstocking of our products. Our products may also be returned by our Operating Subsidiaries’ customers in large quantities due to, among other things, product quality issues or delayed or incorrect delivery, resulting in shelving of products that may increase the risk of obsolescence.

In addition, certain of our products require specific handling throughout the supply chain. For instance, temperature control is required in our Operating Subsidiaries’ retail stores or during the transportation of frozen foods in order to maintain the safety and quality of such products. Any unexpected and adverse changes in the optimal storage conditions or poor handling of products may cause damage to or result in deterioration or contamination of our products. As such, any of the aforesaid events may result in an increased risk of inventory obsolescence.

Our Operating Subsidiaries’ business operations could be adversely affected by labor shortages or increases in staff costs.

We believe that hiring, training and retaining qualified employees are critical to our success. The nature of our Operating Subsidiaries’ business generally requires the sales personnel at our retail stores to have sufficient knowledge to promote our products to customers. Our Operating Subsidiaries’ also need employees to station at our warehouse facilities to receive delivery of products from our Operating Subsidiaries’ suppliers, manage our Operating Subsidiaries’ inventory and repackage certain food items. Any difficulty to employ and retain experienced sales personnel in retail stores and employees in warehouses may have a material adverse impact on our Operating Subsidiaries’ overall operations. When there is a shortage of labor in the market our Operating Subsidiaries may be required to pay higher wages to compete for suitable and qualified employees, which could result in higher staff costs. We cannot assure that our Operating Subsidiaries will be able to hire and retain sufficient suitable employees and/or shift the burden of increased staff costs to our Operating Subsidiaries’ customers, in which case our profit margins and results of operations may be adversely affected. Material labor shortages could have a material and adverse effect on our business, results of operations and prospects.

Any failure to obtain or renew approvals, licenses and permits required for our Operating Subsidiaries’ operations could materially and adversely affect our business and results of operations.

Our Operating Subsidiaries’ business is regulated by various laws and regulations in Hong Kong, which, among other things, require them to complete certain registrations and to obtain various licenses and certificates for our operations. For details, see “Regulatory Environment and the Laws and Regulations of Hong Kong.”

Most of the licenses needed for our Operating Subsidiaries’ operations are subject to examinations or verifications by relevant authorities and are valid only for a fixed period of time, subject to renewal and accreditation. Compliance with the relevant laws and regulations may require substantial expenses, and any non-compliance with such laws and regulations may expose our Operating Subsidiaries to liabilities. In case of any non-compliance, our Operating Subsidiaries may have to incur significant expenses and divert substantial management time to remedy any deficiencies. Our Operating Subsidiaries’ may experience difficulties or failures in obtaining the necessary approvals, licenses and permits for our Operating Subsidiaries’ new retail stores. In addition, there can be no assurance that our Operating Subsidiaries will be able to obtain or renew all of the approvals, licenses and permits required for our Operating Subsidiaries’ existing business operations upon expiration in a timely manner or at all. If our Operating Subsidiaries cannot obtain or maintain all licenses required to operate our Operating Subsidiaries’ business, planned new business operations and expansion may be delayed, and our Operating Subsidiaries’ ongoing business could be interrupted. Our Operating Subsidiaries may also be subject to prosecutions and penalties.

We are subject to risk of uncertainties of our future plans to expand to new geographic areas and offer new products.

A part of our Group’s expansion plan is to expand the geographic coverage of our Group’s retail network. To implement such expansions, we intend to rent and renovate new retail stores, add equipment to new retail stores and hire additional staff to support the operations. Accordingly, our overall operating costs will increase substantially due to the anticipated rental and related cost, renovation and time cost in relation to the setting up of new retail stores and the consequential increase in the number of employees. It is expected that additional costs will be incurred for opening new retail stores. The anticipated benefits to be generated from our expansion plans, such as increase in revenue, may not be as significant as expected due to factors beyond our control, such as the general market conditions, the continued impact of COVID-19, the performance of the industry and the economic and political environment in Hong Kong. Such factors may cause a delay in realizing the benefits of our expansion plan, and hence, our financial performance, in particular our profitability, may be adversely affected. In addition, there is also no assurance that our future plans will materialize or be completed by the predetermined timeframe, or that our objectives will be fully or partially achieved.

Additionally, expanding into more diverse new products and offerings and increased number of products involve new risks and challenges. Our lack of familiarity with new products and services and lack of relevant user data relating to these new offerings may make it more difficult for us to anticipate user demand and preferences. We may misjudge user demand and the potential profitability of a new product or service. We may find it more difficult to inspect and control quality and ensure proper handling, storage and delivery of new products. We may experience higher return rates on new products, user complaints about new products and services and costly liability claims as a result of selling such products and services, any of which would harm our brand and reputation as well as our results of operations. It may be difficult for us to achieve profitability in the new product or service categories, and our profit margin, if any, may be lower than we anticipate or have experienced historically, which would adversely affect our results of operations. We cannot assure you that we will be able to recoup our investments in introducing any new product and service categories.

Measures taken to prevent intellectual property infringement may be insufficient.

As of December 31, 2022, we had registered 24 trademarks associated with the logo and brand name of “Greendotdot” in Hong Kong and in the PRC. Any occurrence of counterfeiting or imitation could negatively impact our reputation and brand name and could result in a reduction of our market share, cause a long-term or even permanent decline in our sales and profitability and increase our administrative costs in respect of detection and enforcement of our intellectual property rights.

We consider our trademarks, brand name and other intellectual property to be material for our business. Preventing intellectual property infringement is difficult, costly and time-consuming. Continued unauthorized use of our intellectual properties by unrelated third parties may damage our reputation and brand image. The measures we have taken to protect our trademarks and other intellectual property rights may not be adequate to prevent unauthorized use of our intellectual properties by unrelated third parties. If we are unable to adequately protect our trademarks and other intellectual properties, our brand image may be harmed, and our results of operations may suffer as a result.

If our Group fails to implement and maintain an effective system of internal controls, our Group may be unable to accurately or timely report our results of operations or prevent fraud, and investor confidence and the market price of our Ordinary Shares may be materially and adversely affected.

Prior to this offering, our Group was a private company with limited accounting personnel. Furthermore, prior to this offering, our management has performed only limited assessments of the effectiveness of our internal control over financial reporting, and our independent registered public accounting firm had not conducted an audit of our internal control over financial reporting. Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, is designed to prevent fraud.

Our failure to implement and maintain effective internal controls over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reported financial information, which may result in volatility in and a decline in the market price of our Ordinary Shares.

Upon the completion of this offering, our Company will become a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, will require that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F. In addition, if we cease to be an “emerging growth company” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting on an annual basis. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a burden on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify material weaknesses and deficiencies in our internal control over financial reporting. The Public Company Accounting Oversight Board, or PCAOB, has defined a material weakness as “a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim statements will not be prevented or detected on a timely basis.”

In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. Generally speaking, if we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations and lead to a decline in the trading price of our Ordinary Shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud, misuse of corporate assets and legal actions under the United States securities laws and subject us to potential delisting from the NYSE American, to regulatory investigations and to civil or criminal sanctions.

We may be unable to detect, deter and prevent all instances of fraud or other misconduct committed by our employees or other third parties.

We are exposed to the risk of fraud or other misconduct by our employees and other third parties. Misconduct by such parties may include theft, unauthorized business transactions, bribery or breaches of applicable laws and regulations, which may be difficult to detect or prevent. We are not aware of any instances of fraud, theft or other misconduct involving employees or other third parties that have had any material and adverse impact on our business and results of operations during the years ended December 31, 2021 and 2022. However, there is no assurance that there will not be any such instances in the future. We may be unable to prevent, detect or deter all instances of misconduct. Any misconduct committed against our interests, which may include past acts that have gone undetected or future acts, could subject us to financial losses and harm our reputation and may have a material and adverse effect on our business, financial condition, results of operations and prospects.

We may be harmed by negative publicity.

We operate in highly competitive industries, and there are other companies in the market that offer similar products. We derive most of our customers through word of mouth, and we rely on the positive feedback of our customers. Thus, customer satisfaction is critical to the success of our business, as this will also result in potential referrals from our existing customers. If we fail to meet our customers’ expectations, there may be negative feedback regarding our products and/or services, which may have an adverse impact on our business and reputation. In the event we are unable to maintain a high level of customer satisfaction, or any customer dissatisfaction is inadequately addressed, our business, financial condition, results of operations and prospects may also be adversely affected.

Our reputation may also be adversely affected by negative publicity in reports, publications such as major newspapers and forums, or any other negative publicity or rumors. There is no assurance that our Group will not experience negative publicity in the future or that such negative publicity will not have a material and adverse effect on our reputation or prospects. This may result in our inability to attract new customers or retain existing customers and may in turn adversely affect our business and results of operations.

The war in Ukraine could materially and adversely affect our business and results of operations.

The recent invasion by Russia and resulting outbreak of war in Ukraine resulting in economic sanctions has already affected global economic markets, including elevated commodity prices and a dramatic increase in the price of oil and gas globally. The threatened dramatic increase in food prices and shortages are a result of Ukraine and Russia being major exporters of grains and fertilizer, including potash. The uncertain resolution of this conflict could result in protracted and/or severe damage to the global economy, including skyrocketing inflation. With major commodities such as wheat, corn, oil and natural gas surging in response to the Russian-Ukraine conflict, it is unlikely that inflation will ease anytime soon, which could have a material adverse effect on our business and financial condition. Recent inflationary pressures have not had a material impact on the Group’s business, as the Group secures orders and raw materials well in advance; generally, three months. In addition, the Group’s base currency of settlement is the Hong Kong dollar, which is pegged to the US$. Given the strong US$ against all major international currencies (and, as a result, the strong Hong Kong dollar), surging commodities prices have not had a material effect on the Group, as the increase in prices was negated by the strong Hong Kong dollar. The Group will only be materially affected if the strength of the Hong Kong dollar decreases substantially against counterparty currency as well as a substantial increase in prices of raw materials, which cannot be offset against each other.

Russia’s recent military interventions in Ukraine have led to, and may lead to, additional sanctions being levied by the United States, European Union and other countries against Russia. Russia’s military incursion and the resulting sanctions could adversely affect global energy and financial markets and thus could affect our customers’ businesses and our business, even though we do not have any direct exposure to Russia or the adjoining geographic regions. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict but could be substantial. Any such disruptions caused by Russian military action or resulting sanctions may magnify the impact of other risks described herein. We cannot predict the progress or outcome of the situation in Ukraine, as the conflict and governmental reactions are rapidly developing and beyond their control. Prolonged unrest, intensified military activities or more extensive sanctions impacting the region could have a material adverse effect on the global economy, and such effect could in turn also have a material adverse effect on our business, financial condition, results of operations and prospects.

We are exposed to risks with respect to acts of war, terrorist attacks, epidemics, political unrest, adverse weather conditions and other uncontrollable events.

Unforeseeable circumstances and other factors such as power outages, labor disputes, adverse weather conditions or other catastrophes, epidemics or outbreaks of communicable diseases such as COVID-19, Severe Acute Respiratory Syndrome, Middle East Respiratory Syndrome, Ebola or other contagious diseases, may disrupt our Operating Subsidiaries’ operations and cause loss and damage to our production and processing facilities, and acts of war, terrorist attacks or other acts of violence may further materially and adversely affect the global financial markets and consumer confidence. Given the relatively small geographical size of Hong Kong, any of such incidents may have a widespread effect on our Operating Subsidiaries’ business operations, which could in turn adversely and materially affect our business, results of operations and financial condition.

Our Operating Subsidiaries’ revenue is susceptible to changes in the economic conditions and regulatory environment, social and/or political conditions and civil disturbance or disobedience. We cannot assure that there will be no political or social unrest in the near future or that there will not be other events that could lead to widespread protests or the disruption of the economic, political and social conditions in Hong Kong. If such events persist for a prolonged period of time or the economic, political and social conditions in Hong Kong are disrupted, our Operating Subsidiaries’ overall business and results of operations may be adversely affected.

Our Operating Subsidiaries’ business may also be affected by macroeconomic factors in the countries in which they operate, such as general economic conditions, market sentiment and regulatory, fiscal and other governmental policies, all of which are beyond our control. Any such events may cause damage or disruption to our Operating Subsidiaries’ business, markets, customers and suppliers, any of which may materially and adversely affect our Operating Subsidiaries’ business, financial condition, results of operations and prospects.

Our Operating Subsidiaries’ business and operations may be materially and adversely affected in the event of a re-occurrence or a prolonged global pandemic outbreak of COVID-19.

The global pandemic outbreak of COVID-19 announced by the World Health Organization in early 2020 has disrupted our Operating Subsidiaries’ operations and the operations of our Operating Subsidiaries’ customers and suppliers. If the development of the COVID-19 outbreak becomes more severe or if our Operating Subsidiaries’ suppliers are forced to close down their businesses after prolonged disruptions to their operations, we may experience a delay or shortage of raw materials, supplies and/or services by our Operating Subsidiaries’ suppliers, or our Operating Subsidiaries’ customers may not visit our retail locations or purchase our products. In such event, our operations may be severely disrupted, which may have a material and adverse effect on our business, financial condition and results of operations. In addition, if any of our employees is suspected of having contracted COVID-19, some or all of our employees may be quarantined, and we will be required to disinfect our workplace and our facilities. In the event our employees are placed under quarantine orders, we may face a shortage of labor, and our operations may be severely disrupted. Our revenue and profitability may also be materially affected if the COVID-19 outbreak continues to materially affect the overall economic and market conditions in Hong Kong, and the economy slowdown and/or negative business sentiment could potentially have an adverse impact on our business and operations. We are uncertain as to when the outbreak of COVID-19 will be contained, and we cannot predict if the impact of the outbreak will be short-lived or long-lasting. If the outbreak of COVID-19 is not effectively controlled within a short period of time, our business, financial condition, results of operations and prospects may be materially and adversely affected.

RISKS RELATING TO OUR INDUSTRY

Our Operating Subsidiaries are susceptible to foodborne diseases and may be exposed to litigation and negative publicity which may have a material adverse effect on our business operations and financial condition.

Our Operating Subsidiaries currently import raw materials and products from Canada, Europe, the PRC, Thailand and the United States. Any outbreak of foodborne diseases in these countries may severely impair our Operating Subsidiaries’ suppliers’ ability to supply or continue to supply products that may be contaminated or otherwise unsafe due to the outbreak of diseases. Any epidemic of contagious diseases affecting humans, such as COVID-19, swine influenza, avian influenza, Africa Swine Fever, or Salmonella, might also result in unfavorable business operating conditions for our Operating Subsidiaries’ suppliers, slowdown in economic growth and overall negative business sentiment. As our Operating Subsidiaries rely on the continuous and stable supply of products by suppliers and sales of products to customers, our Operating Subsidiaries’ business and financial performance may in turn be materially and severely affected. Our Operating Subsidiaries also experienced some short-term shipment delays for certain products as global shipping logistics had at times been affected by the COVID-19 pandemic.

Furthermore, the occurrence of such outbreaks of foodborne diseases affecting humans in countries from which our Operating Subsidiaries import products may generate public concerns for their safety, influence customers’ confidence in our brand and adversely affect our reputation. Adverse publicity about the quality or health concerns of our products, regardless of whether the allegations are true, may negatively affect our business, as it discourages customers from buying our products. Any incidents of foodborne illness caused by our products may even trigger litigation or disciplinary action against us, which may expose our Group to significant liabilities or to business suspension or cessation order by the relevant authorities if they result in decisions against us or incur significant litigation costs to our Group regardless of the result. As such, our business, financial position and prospects may be adversely affected.

Our Operating Subsidiaries operate in a competitive market, and if they fail to compete effectively, they may lose market share, and our results of operation may be adversely affected.

The overall natural and organic food retail market is considered to be competitive and fragmented with a large quantity of individual food stores specializing in a variety of natural and organic food. The natural and organic food retail stores in Hong Kong mainly compete with store location, food quality, price and product offerings.

There is no guarantee that we will be able to maintain our competitive strengths in the future when facing changes in market trends. Some of our existing and potential competitors may have advantages over us, in terms of product portfolio, reputation, financial resources, sourcing and distribution network. In addition, in view of the increasing awareness and acceptance of online platforms for the distribution of food products, we may also face increasing competition from new types of competitors with a different business model which enables them to reduce their reliance on different intermediaries in the supply chain and in turn enables them to offer products at relatively lower selling prices to customers. This intense competition may lead our existing or potential competitors to adopt hostile business strategies such as predatory price reductions, which may result in loss of our market share and reduced product margins if we are forced to lower our pricing in response to these pricing tactics adopted by our competitors. As such, our overall business, results of operations and financial condition may be materially and adversely affected.

RISKS RELATING TO DOING BUSINESS IN THE JURISDICTIONS IN WHICH OUR OPERATING SUBSIDIARIES OPERATE

Through long arm provisions under the current PRC laws and regulations, the Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of our Ordinary Shares. Changes in the policies, regulations and rules and the enforcement of laws of the Chinese government may also be quick with little advance notice, and our assertions and beliefs of the risk imposed by the PRC legal and regulatory system cannot be certain.

Our Group’s operations are primarily located in Hong Kong, and some of our Operating Subsidiaries’ suppliers are PRC companies that have shareholders or directors that are PRC individuals and some customers at our Operating Subsidiaries’ retail outlets may be PRC individuals. Due to long arm provisions under the current PRC laws and regulations, there remains regulatory uncertainty with respect to the implementation and interpretation of laws in China. The PRC government may choose to exercise significant oversight and discretion, and the policies, regulations, rules, and the enforcement of the laws of the Chinese government to which our Operating Subsidiaries are subject may change rapidly and with little advance notice to them or our shareholders. As a result, the application, interpretation and enforcement of new and existing laws and regulations in the PRC are often uncertain. In addition, these laws and regulations may be interpreted and applied inconsistently by different agencies or authorities and may be inconsistent with our current policies and practices. New laws, regulations and other government directives in the PRC may also be costly to comply with, and such compliance or any associated inquiries or investigations or any other government actions may:

We are aware that the PRC government recently initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking down on certain activities in the securities markets, enhancing supervision over China-based companies listed overseas using variable interest entity structures, adopting new measures to extend the scope of cybersecurity reviews and expanding efforts in anti-monopoly enforcement. Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our Operating Subsidiaries’ daily business operation and the ability to accept foreign investments and list on a U.S. or other foreign exchange.

The Chinese government may intervene in or influence our Operating Subsidiaries’ operations at any time or may exert more control over offerings conducted overseas and foreign investment in China-based issuers, which may result in a material change in their operations and/or the value of our Ordinary Shares. The promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case, that restrict or otherwise unfavorably impact our Operating Subsidiaries’ ability or the way they conduct business, could require them to change certain aspects of their business to ensure compliance, which could decrease demand for our Operating Subsidiaries’ services, reduce revenues, increase costs, require them to obtain more licenses, permits, approvals or certificates or subject them to additional liabilities. To the extent any new or more stringent measures are required to be implemented, our business, financial condition and results of operations could be adversely affected, and such measures could materially decrease the value of our Ordinary Shares, potentially rendering them worthless.

Our Operating Subsidiaries may become subject to a variety of PRC laws and other regulations regarding data security or securities offerings that are conducted overseas and/or other foreign investment in China-based issuers, and any failure to comply with applicable laws and regulations could have a material and adverse effect on our business, financial condition and results of operations and may hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless.

On June 10, 2021, the Standing Committee of the National People’s Congress enacted the PRC Data Security Law, which took effect on September 1, 2021. The law requires data collection to be conducted in a legitimate and proper manner and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.

On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on certain activities in the securities markets and promote the high-quality development of the capital markets, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas and to establish and improve the system of extraterritorial application of the PRC securities laws.

On August 20, 2021, the 30th meeting of the Standing Committee of the 13th National People’s Congress voted and passed the “Personal Information Protection Law of the People’s Republic of China,” or “PRC Personal Information Protection Law,” which became effective on November 1, 2021. The PRC Personal Information Protection Law applies to the processing of personal information of natural persons within the territory of China that is carried out outside of China where (i) such processing is for the purpose of providing products or services for natural persons within China; (ii) such processing is to analyze or evaluate the behavior of natural persons within China; or (iii) there are any other circumstances stipulated by related laws and administrative regulations.

On December 28, 2021, the CAC jointly with the relevant authorities formally published the Measures for Cybersecurity Review (2021) which took effect on February 15, 2022 and replaced the former Measures for Cybersecurity Review (2020) issued on July 10, 2021. The Measures for Cybersecurity Review (2021) stipulates that operators of critical information infrastructure purchasing network products and services and online platform operators (together with the operators of critical information infrastructure, the “Operators”) carrying out data processing activities that affect or may affect national security shall conduct a cybersecurity review, and any online platform operator who controls more than one million users’ personal information must go through a cybersecurity review by the cybersecurity review office if it seeks to be listed in a foreign country.

Our Operating Subsidiaries may collect and store certain data (including certain personal information) from our clients, who may be PRC individuals, in connection with our business and operations and for “Know Your Customer” purposes (to combat money laundering).

These statements and regulatory actions are new, and it is highly uncertain how soon the legislative or administrative regulation-making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any. It is also highly uncertain what the potential impact such modified or new laws and regulations will have on the daily business operations of our Operating Subsidiaries, their respective abilities to accept foreign investments and the listing of our Ordinary Shares on a U.S. or other foreign exchanges. There remains significant uncertainty in the interpretation and enforcement of relevant PRC cybersecurity laws and regulations. If the Draft Overseas Listing Regulations are adopted into law in the future and become applicable to our Operating Subsidiaries, if any of our Operating Subsidiaries is deemed to be an “Operator” required to file for cybersecurity review before listing in the United States or if the Measures for Cybersecurity Review (2021) or the PRC Personal Information Protection Law becomes applicable to our Operating Subsidiaries, the business operations of our Operating Subsidiaries and the listing of our Ordinary Shares in the United States could be subject to the CAC’s cybersecurity review or CSRC’s review in the future. If our Operating Subsidiaries become subject to the CAC or CSRC review, we cannot assure you that our Operating Subsidiaries will be able to comply with the regulatory requirements in all respects, and the current practice of collecting and processing personal information may be ordered to be rectified or terminated by regulatory authorities. In the event of a failure to comply, our Operating Subsidiaries may become subject to fines and other penalties, which may have a material adverse effect on our business, operations and financial condition and may hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless.

If the Chinese government chooses to exert more oversight and control over securities offerings that are conducted overseas and/or foreign investment in China-based issuers, such action may significantly limit or completely hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless.

Recent statements, laws and regulations by the Chinese government, including the Measures for Cybersecurity Review (2021), the PRC Personal Information Protection Law and the Trial Measures, have indicated an intent to exert more oversight and control over securities offerings that are conducted overseas and/or foreign investments in China-based issuers. It is uncertain whether the Chinese government will adopt additional requirements or extend the existing requirements to apply to our Operating Subsidiaries located in Hong Kong. We could be subject to approval or review of Chinese regulatory authorities to pursue this offering.

On February 17, 2023, with the approval of the State Council, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. Pursuant to the Trial Measures, (i) domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following their submission of initial public offerings or listing applications. If a domestic company fails to complete the required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings and fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines; (ii) if the issuer meets both of the following criteria, the overseas offering and listing conducted by such issuer shall be deemed an indirect overseas offering and listing by a PRC domestic company: (A) 50% or more of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year were derived from PRC domestic companies; and (B) the majority of the issuer’s business activities are carried out in mainland China, or its main place(s) of business are located in mainland China, or the majority of its senior management team in charge of its business operations and management are PRC citizens or have their usual place(s) of residence located in mainland China; and (C) where a PRC domestic company is seeking an indirect overseas offering and listing in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and where an issuer makes an application for an initial public offering or listing in an overseas market, the issuer shall submit filings with the CSRC within three business days after such application is submitted. As of the date of this prospectus, no effective laws or regulations in the PRC explicitly require us to seek approval from the CSRC or any other PRC governmental authorities for our overseas listing plan, nor has our Company or any of our Operating Subsidiaries received any inquiry, notice, warning, or sanctions regarding our planned overseas listing from the CSRC or any other PRC governmental authorities.

Further, as of the date of this prospectus, in the opinion of our Hong Kong legal counsel, Robertsons, we are not required to obtain permission from any Hong Kong authorities to issue our Ordinary Shares to investors; and in the opinion of our PRC legal counsel, we are not subject to permission requirements from the CSRC, the CAC or any other entity that is required to approve of our Operating Subsidiaries’ operations and offer our securities being registered to foreign investors. The SCNPC or other PRC regulatory authorities may, in the future, promulgate laws, regulations or implementing rules that require our Company, or any of our subsidiaries, to obtain regulatory approval from Chinese authorities before listing in the U.S.

Any future action by the PRC government expanding the categories of industries and companies whose foreign securities offerings are subject to review by the CSRC could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of such securities to significantly decline or be worthless.

The Hong Kong legal system is subject to uncertainties which could limit the legal protections available to our Operating Subsidiaries.

Hong Kong is a Special Administrative Region of the PRC. Following British colonial rule from 1842 to 1997, China assumed sovereignty under the “one country, two systems” principle. The Hong Kong Special Administrative Region’s constitutional document, the Basic Law, ensures that the current political situation will remain in effect for 50 years. Hong Kong has enjoyed the freedom to function with a high degree of autonomy for its affairs, including currencies, immigration and customs operations, and its independent judiciary system and parliamentary system. On July 14, 2020, the United States signed an executive order to end the special status enjoyed by Hong Kong post-1997. As the autonomy currently enjoyed may be compromised, it could potentially impact Hong Kong’s common law legal system and may, in turn, result in uncertainty in, for example, the enforcement of our contractual rights. This could, in turn, materially and adversely affect our business and operations. Additionally, intellectual property rights and confidentiality protections in Hong Kong may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect of future developments in the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the pre-emption of local regulations by national laws. These uncertainties could limit the legal protections available to us, including the ability of our Operating Subsidiaries to enforce agreements with their clients.

We may be affected by adverse changes in the political, economic, regulatory or social conditions in the countries in which we and our customers and suppliers operate.

We, our Operating Subsidiaries’ customers and suppliers are governed by the laws, regulations and government policies in each of the countries in which we and our Operating Subsidiaries’ customers and suppliers operate or into which we intend to expand our business and operations, including Hong Kong. Our business and future growth are dependent on the political, economic, regulatory and social conditions in Hong Kong and in the countries where our suppliers reside, which are beyond our control. The Hong Kong economy differs from the economies of most developed countries in many respects, including the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Economic conditions in Hong Kong are sensitive to global economic conditions. Any economic downturn, changes in policies, currency and interest rate fluctuations, capital controls or capital restrictions, labor laws, changes in environmental protection laws and regulations, duties and taxation and limitations on imports and exports in these countries may materially and adversely affect our business, financial condition, results of operations and prospects.

We are exposed to political risks associated with conducting business in Hong Kong.

Our Operating Subsidiaries operations are principally based in Hong Kong. Accordingly, our Operating Subsidiaries’ business operations and financial conditions may be affected by the political and legal developments in Hong Kong. Any adverse economic, social and/or political conditions, material social unrest, strike, riot, civil disturbance or disobedience, as well as significant natural disasters, may adversely affect our Operating Subsidiaries’ business operations. Hong Kong is a special administrative region of the PRC, and the basic policies of the PRC regarding Hong Kong are reflected in the Basic Law, namely, Hong Kong’s constitutional document, which provides Hong Kong with a high degree of autonomy and executive, legislative and independent judicial powers, including that of final adjudication under the principle of “one country, two systems”. However, there is no assurance that there will not be any changes in the economic, political and legal environment in Hong Kong in the future. Since our Operating Subsidiaries’ operations are based in Hong Kong, any change of such political arrangements may pose immediate threat to the stability of the economy in Hong Kong, thereby directly and adversely affecting our Operating Subsidiaries’ results of operations and financial positions.

Under the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, Hong Kong is exclusively in charge of its internal affairs and external relations, while the government of the PRC is responsible for its foreign affairs and defense. As a separate customs territory, Hong Kong maintains and develops relations with foreign states and regions. Recently, there have been increasing concerns that Hong Kong residents and visitors will be subject to the legal system of mainland China, thereby undermining the region’s autonomy and people’s civil liberties. We cannot assure you that Hong Kong’s status as a Special Administrative Region of the PRC will continue.

RISKS RELATED TO OUR SECURITIES AND THIS OFFERING

Our Ordinary Shares may be prohibited from being traded on a national exchange under the HFCA Act if the PCAOB is unable to inspect our auditors for three consecutive years beginning in 2021.

The HFCA Act was enacted on December 18, 2020. The HFCA Act states if the SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit the company’s shares from being traded on a national securities exchange or in the over-the- counter trading market in the United States.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and trading prohibition requirements described above.

On June 22, 2021, the U.S. Senate passed a bill that, if passed by the U.S. House of Representatives and signed into law, would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two years.

On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.

On December 16, 2021, PCAOB announced the PCAOB HFCA Act determinations (the “PCAOB determinations”) relating to the PCAOB’s inability to inspect or investigate completely registered public accounting firms headquartered in mainland China of the PRC or Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in the PRC or Hong Kong.

Our auditor, JP Centurion & Partners PLT, the independent registered public accounting firm that issues the audit report included elsewhere in this prospectus, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to the laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. JP Centurion & Partners PLT is headquartered in Malaysia and has been inspected by the PCAOB on a regular basis, with the last inspection in 2020. Therefore, we believe that, as of the date of this prospectus, our auditor is not subject to the PCAOB determinations. However, the recent developments add uncertainties to our offering, and we cannot assure you whether the NYSE American or regulatory authorities would not apply additional and/or more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, the adequacy of personnel and training or the sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements.

On August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People’s Republic of China, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong completely, consistent with U.S law. It includes three provisions that, if abided by, would grant the PCAOB complete access for the first time: (1) the PCAOB has sole discretion to select the firms, audit engagements and potential violations it inspects and investigates – without consultation with, nor input from, Chinese authorities; (2) procedures are in place for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; and (3) the PCAOB has direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates.

On December 15, 2022, the PCAOB announced that it has completed a test inspection of two selected auditing firms in mainland China and Hong Kong and has voted to vacate its previous Determination Report, which concluded in December 2021 that the PCAOB could not inspect or investigate completely registered public accounting firms based in mainland China or Hong Kong. On December 23, 2022, the AHFCAA was enacted, which amended the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three and such act was signed into law on December 29, 2022. However, if in the future the PCAOB is prohibited from conducting complete inspections and investigations of PCAOB-registered public accounting firms in mainland China and Hong Kong, then the companies audited by those registered public accounting firms could be subject to a trading prohibition on U.S. markets pursuant to the Holding Foreign Companies Accountable Act.

There can be no assurance that China will abide by the Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People’s Republic of China and that on-site inspections and investigations of firms headquartered in mainland China and Hong Kong will occur and allow for full and timely access to information.

An active trading market for our Ordinary Shares may not be established or, if established, may not continue, and the trading price for our Ordinary Shares may fluctuate significantly.

We cannot assure you that a liquid public market for our Ordinary Shares will be established. If an active public market for our Ordinary Shares does not occur following the completion of this offering, the market price and liquidity of our shares may be materially and adversely affected. The public offering price for our Ordinary Shares in this offering was determined by negotiation between us and the representative of the underwriter based upon several factors, and we can provide no assurance that the trading price of our Ordinary Shares after this offering will not decline below the public offering price. As a result, investors in our Ordinary Shares may experience a significant decrease in the value of their Ordinary Shares.

We may not maintain the listing of our Ordinary Shares on the NYSE American, which could limit investors’ ability to make transactions in our Ordinary Shares and subject us to additional trading restrictions.

We intend to list our Ordinary Shares on the NYSE American concurrently with this offering. In order to continue listing our shares on the NYSE American, we must maintain certain financial and share price levels, and we may be unable to meet these requirements in the future. We cannot assure you that our Ordinary Shares will continue to be listed on the NYSE American in the future. If the NYSE American delists our Ordinary Shares, and we are unable to list our shares on another national securities exchange, we will endeavor to have our Ordinary Shares quoted on an over-the-counter market in the United States. If this were to occur, we could face significant material adverse consequences, including:

As long as our Ordinary Shares are listed on the NYSE American, U.S. federal law prevents or preempts the states from regulating their sale. However, the law does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar their sale. Further, if we were no longer listed on the NYSE American, we would be subject to regulations in each state in which we offer our Ordinary Shares.

Certain recent initial public offerings of companies with public floats comparable to our anticipated public float have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company. We may experience similar volatility, which may make it difficult for prospective investors to assess the value of our Ordinary Shares.

In addition to the risks addressed below in “— The trading price of our Ordinary Shares may be volatile, which could result in substantial losses to investors,” our Ordinary Shares may be subject to extreme volatility that is seemingly unrelated to the underlying performance of our business. Recently, companies with comparable public floats and initial public offering sizes have experienced instances of extreme stock price run-ups followed by rapid price declines, and such stock price volatility was seemingly unrelated to the respective company’s underlying performance. Although the specific cause of such volatility is unclear, our anticipated public float may amplify the impact the actions taken by a few shareholders have on the price of our Ordinary Shares, which may cause our share price to deviate, potentially significantly, from a price that better reflects the underlying performance of our business. Should our Ordinary Shares experience run-ups and declines that are seemingly unrelated to our actual or expected operating performance and financial condition or prospects, prospective investors may have difficulty assessing the rapidly changing value of our Ordinary Shares. In addition, investors of our Ordinary Shares may experience losses, which may be material, if the price of our Ordinary Shares declines after this offering or if such investors purchase shares of our Ordinary Shares prior to any price decline.

Holders of our Ordinary Shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our Ordinary Shares. As a result of this volatility, investors may experience losses on their investment in our Ordinary Shares. Furthermore, the potential extreme volatility may confuse the public investors of the value of our stock, distort the market perception of our stock price and our Company’s financial performance and public image and negatively affect the long-term liquidity of our Ordinary Shares, regardless of our actual or expected operating performance. If we encounter such volatility, including any rapid stock price increases and declines seemingly unrelated to our actual or expected operating performance and financial condition or prospects, it will likely make it difficult and confusing for prospective investors to assess the rapidly changing value of our Ordinary Shares and understand the value thereof.

The trading price of our Ordinary Shares may be volatile, which could result in substantial losses to investors.

The trading price of our Ordinary Shares may be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, like the performance and fluctuation of the market prices of other companies with business operations located in Hong Kong that have listed their securities in the United States. In addition to market and industry factors, the price and trading volume for our Ordinary Shares may be highly volatile for factors specific to our own operations, including the following:

Any of these factors may result in large and sudden changes in the volume and price at which our Ordinary Shares will trade.

In the past, shareholders of public companies have often brought securities class action suits against companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our Ordinary Shares, the market price for our shares and trading volume could decline.

The trading market for our Ordinary Shares will be influenced by research or reports that industry or securities analysts publish about our business. If one or more analysts who cover us downgrade our Ordinary Shares, the market price for our Ordinary Shares would likely decline. If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price or trading volume for our Ordinary Shares to decline.

The sale or availability for sale of substantial amounts of our Ordinary Shares could adversely affect their market price.

Sales of substantial amounts of our Ordinary Shares in the public market after the completion of this offering, or the perception that these sales could occur, could adversely affect the market price of our Ordinary Shares and could materially impair our ability to raise capital through equity offerings in the future. As of the date of this prospectus, we have 9,375,000 Ordinary Shares outstanding. The Ordinary Shares sold in this offering will be freely tradable without restriction or further registration under the Securities Act, and the Ordinary Shares held by our existing shareholders may also be sold in the public market in the future subject to the restrictions in Rule 144 under the Securities Act and applicable lock-up agreements. There will be 11,375,000 Ordinary Shares outstanding immediately after this offering (or 11,675,000 Ordinary Shares if the underwriter exercises its over-allotment option to purchase such additional Ordinary Shares in full). In connection with this offering, our directors and officers named in the section “Management” and certain shareholders have agreed not to sell any shares until 12 months after the date of this prospectus without the prior written consent of the underwriters, subject to certain exceptions. However, the underwriters may release these securities from these restrictions at any time. We cannot predict what effect, if any, market sales of securities held by our Controlling Shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our shares. See “Underwriting” and “Shares Eligible for Future Sale” for a more detailed description of the restrictions on selling our securities after this offering.

Short selling may drive down the market price of our Ordinary Shares.

Short selling is the practice of selling shares that the seller does not own but rather has borrowed from a third party with the intention of buying identical shares back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the shares between the sale of the borrowed shares and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller’s interest for the price of the shares to decline, many short sellers publish, or arrange for the publication of, negative opinions and allegations regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling the shares short. These short attacks have, in the past, led to selling of shares in the market. If we were to become the subject of any unfavorable publicity, whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality.

Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Ordinary Shares for a return on your investment.

We currently intend to retain all of our available funds and any future earnings after this offering to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our Ordinary Shares as a source for any future dividend income. Our board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our securities will likely depend entirely upon any future price appreciation of our Ordinary Shares. There is no guarantee that our Ordinary Shares will appreciate in value after this offering or even maintain the price at which you purchased our Ordinary Shares. You may not realize a return on your investment in our Ordinary Shares, and you may even lose your entire investment.

Because our public offering price is substantially higher than our net tangible book value per Ordinary Share, you will experience immediate and substantial dilution.

If you purchase Ordinary Shares in this offering, you will pay substantially more than the corresponding amount paid by existing shareholders for their shares and more than our net tangible book value per share. As a result, you will experience immediate and substantial dilution of US$5.36 per Ordinary Share (or 300,000 Ordinary Shares if the underwriter exercises its over-allotment option to purchase such additional Ordinary Shares in full), representing the difference between our net tangible book value per Ordinary Share of US$0.25 as of December 31, 2022, after giving effect to the net proceeds to us from this offering, assuming no change to the number of Ordinary Shares offered by us as set forth on the cover page of this prospectus and at the assumed public offering price of US$6.50 per Ordinary Share, which is the midpoint of the estimated range of the initial public offering price shown on the front cover of this prospectus. See “Dilution” for a more complete description of how the value of your investment in our Ordinary Shares will be diluted upon the completion of this offering.

You must rely on the judgment of our management as to the uses of the net proceeds from this offering, and such uses may not produce income or increase our share price.

We plan to use the net proceeds of this offering primarily: (i) to set up new retail stores and refurbish existing retail stores; (ii) to develop our probiotics business; (iii) to further enhance our brand recognition; (iv) to lease a new food factory; (v) to upgrade our information technology systems; (vi) to repay bank borrowings and other loans; (vii) for business development (including acquisitions); and (viii) for working capital and general corporate purposes. See “Use of Proceeds.” However, our management will have considerable discretion in the application of the net proceeds received by us in this offering. You will not have the opportunity, as part of your investment decision, to assess whether proceeds are being used appropriately. The net proceeds may be used for corporate purposes that do not improve our efforts to achieve or maintain profitability or increase our share price. The net proceeds from this offering may be placed in investments that do not produce income or that lose value.

If we are classified as a passive foreign investment company, United States taxpayers who own our securities may have adverse United States federal income tax consequences.

A non-U.S. corporation such as us will be classified as a passive foreign investment company, which is known as a PFIC, for any taxable year if, for such year, either

Passive income generally includes dividends, interest, rents, royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets.

If we are determined to be a PFIC for any taxable year (or any portion thereof) that is included in the holding period of a U.S. taxpayer who holds our securities, the U.S. taxpayer may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements.

It is possible that, for our current taxable year or for any subsequent year, more than 50% of our assets may be assets that produce passive income. We will make this determination following the end of any particular tax year. We treat our affiliated entities as being owned by us for United States federal income tax purposes, not only because we exercise effective control over the operation of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we consolidate their operating results in our consolidated financial statements. For purposes of the PFIC analysis, in general, a non-U.S. corporation is deemed to own its pro rata share of the gross income and assets of any entity in which it is considered to own at least 25% of the equity by value.

For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to be a PFIC, see “Material Tax Considerations — Passive Foreign Investment Company Considerations.”

Our Controlling Shareholders have substantial influence over the Company. Their interests may not be aligned with the interests of our other shareholders, and it could prevent or cause a change of control or other transactions.

As of the date of this prospectus, WKW Investment and CFT Investment (companies controlled by Mr. Wong and Ms. Cheuk, respectively) beneficially own approximately 73.19% and 17.41%, respectively, of our issued and outstanding Ordinary Shares. Upon completion of this offering, WKW Investment and CFT Investment will be the beneficial owners of an aggregate of 6,861,563. Ordinary Shares and 1,632,187 Ordinary Shares, respectively, which will represent 60.32% and 14.35%, respectively, of the then total issued and outstanding Ordinary Shares assuming that the underwriters do not exercise their over-allotment option, 58.77% and 13.98%, respectively, of the total voting power, assuming that the over-allotment option is exercised in full.

Accordingly, our Controlling Shareholders could control the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations, the election of directors and other significant corporate actions, including the power to prevent or cause a change in control. Without the consent of our Controlling Shareholders, we may be prevented from entering into transactions that could be beneficial to us or our minority shareholders. In addition, our directors and officers could violate their fiduciary duties by diverting business opportunities from us to themselves or others. The interests of our largest shareholder may differ from the interests of our other shareholders. The concentration in the ownership of our shares may cause a material decline in the value of our Ordinary Shares. For more information regarding our principal shareholders and their affiliated entities, see “Principal Shareholders.”

We will be a “controlled company” within the meaning of the NYSE American Company Guide and, as a result, will rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.

Upon the completion of this offering, we will be a “controlled company” as defined under the rules of NYSE American Company Guide. For so long as we remain a controlled company under that definition, we are permitted to elect to rely, and will rely, on certain exemptions from corporate governance rules, including exemptions from the rule that a nomination and corporate governance committee be composed entirely of independent directors and a compensation committee be composed entirely of independent directors. As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that may differ significantly from the NYSE American Company Guide. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the NYSE American Company Guide.

As a foreign private issuer that has applied to list our Ordinary Shares on the NYSE American, we rely on provisions in the NYSE American Company Guide that allow us to follow Cayman Islands law with regard to certain aspects of corporate governance. This allows us to follow certain corporate governance practices that differ in significant respects from the corporate governance requirements applicable to U.S. companies listed on the NYSE American.

For example, we are exempt from the NYSE American regulations that require a listed U.S. company to:

As a foreign private issuer, we are permitted to follow home country practice in lieu of the above requirements. Our audit committee is required to comply with the provisions of Rule 10A-3 of the Exchange Act, which is applicable to U.S. companies listed on the NYSE American. Therefore, we intend to have a fully independent audit, risk and compliance committee within one year from the effectiveness of our initial public offering registration statement, in accordance with Rule 10A-3 of the Exchange Act. However, because we are a foreign private issuer, our audit, risk and compliance committee is not subject to additional NYSE American Company Guide requirements applicable to listed U.S. companies, including the requirements to have a minimum of three members and to affirmatively determine that all members are “independent,” using more stringent criteria than those applicable to us as a foreign private issuer.

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.

We are an exempted company incorporated under the laws of the Cayman Islands with limited liability. Our corporate affairs are governed by our Memorandum and Articles of Association, the Companies Act and the common law of the Cayman Islands. The rights of shareholders to take action against our directors and us, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the English common law, which is generally persuasive authority, but is not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions of the United States. In particular, the Cayman Islands has a different body of securities laws than the United States, which provides significantly less protection to investors. In addition, Cayman Islands companies may not have the standing to initiate a shareholder derivative action in a federal court of the United States. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will, in certain circumstances, recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits.

Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than the Memorandum and Articles of Association) or to obtain copies of lists of shareholders of these companies. Our directors are not required under our Memorandum and Articles of Association to make our corporate records available for inspection by our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder resolution or to solicit proxies from other shareholders in connection with a proxy contest.

Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from requirements for companies incorporated in other jurisdictions, such as the U.S. Currently, we plan to rely on home country practice with respect to any corporate governance matter. Accordingly, our shareholders will be afforded less protection than they otherwise would under the rules and regulations applicable to U.S. domestic issuers.

As a result of all of the above, shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of the board of directors or Controlling Shareholders than they would as shareholders of a company incorporated in the United States. For a discussion of significant differences between the provisions of the Companies Act and the laws applicable to companies incorporated in the United States and their shareholders, see “Certain Cayman Islands Company Considerations — Differences in Corporate Law.”

Certain judgments obtained against us by our shareholders may not be enforceable.

We are a Cayman Islands exempted company, and substantially all of our assets are located outside of the United States. In addition, all of our current directors and officers are nationals and residents of countries other than the United States. Substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult for a shareholder to effect service of process within the United States upon these persons or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands may render you unable to enforce a judgment against our assets or the assets of our directors and officers. For more information regarding the relevant laws of the Cayman Islands, see “Enforcement of Civil Liabilities.” As a result of the foregoing, our shareholders may have more difficulties in protecting their interests through actions against us or our officers, directors or major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act for so long as we are an emerging growth company. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important.

The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period, although we have early adopted certain new and revised accounting standards based on transition guidance permitted under such standards. As a result of this election, our future financial statements may not be comparable to other public companies that comply with the public company effective dates for these new or revised accounting standards.

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.

Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our financial results on a semi-annual basis through press releases distributed pursuant to the rules and regulations of the NYSE American. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you if you were investing in a U.S. domestic issuer.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

As discussed above, we are a foreign private issuer, and, therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last Business Day of an issuer’s most recently completed second fiscal quarter. Accordingly, the next determination will be made with respect to us on June 30, 2023. In the future, we would lose our foreign private issuer status if (i) more than 50% of our outstanding voting securities are owned by U.S. residents; and (ii) a majority of our directors or executive officers are U.S. citizens or residents, or we fail to meet additional requirements necessary to avoid loss of foreign private issuer status. If we were to lose our foreign private issuer status, we would be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We also would be required to comply with U.S. federal proxy requirements, and our officers, directors and Principal Shareholders would become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we would lose our ability to rely upon exemptions from certain corporate governance requirements under the listing rules of the NYSE American. As a U.S.-listed public company that is not a foreign private issuer, we would incur significant additional legal, accounting and other expenses that we do not incur as a foreign private issuer.

We will incur significantly increased costs and devote substantial management time as a result of the listing of our Ordinary Shares on the NYSE American.

We will incur additional legal, accounting and other expenses as a public reporting company, particularly after we cease to qualify as an emerging growth company. For example, we will be required to comply with the additional requirements of the rules and regulations of the SEC and the NYSE American rules, including applicable corporate governance practices. We expect that compliance with these requirements will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. In addition, we expect that our management and other personnel will need to divert attention from operational and other business matters to devote substantial time to these public company requirements. We cannot predict or estimate the number of additional costs we may incur as a result of becoming a public company or the timing of such costs.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure create uncertainty for public companies, increasing legal and financial compliance costs and make some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidelines are provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may also initiate legal proceedings against us, and our business may be adversely affected.

ENFORCEABILITY OF CIVIL LIABILITIES

Our Company is an exempted company incorporated with limited liability under the laws of the Cayman Islands. We are incorporated in the Cayman Islands because of certain benefits associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands has a less developed body of securities laws as compared to the United States and provides less protection for investors. In addition, investors may not have standing to sue Cayman Islands companies before the U.S. federal courts.

All of our current operations are conducted outside of the United States, and all of our current assets are located outside of the United States, with the majority of our operations and current assets being located in Hong Kong. All of the directors and executive officers of our Company and the auditors of our Company reside outside the United States, and substantially all of their assets are located outside of the United States. As a result, it may not be possible for investors to effect service of process within the United States upon us or any such persons, or to enforce in the United States any judgment obtained in the U.S. courts against us or any of such persons, including judgments based upon the civil liability provisions of the U.S. securities laws or any U.S. state or territory.

We have appointed Cogency Global Inc., 122 East 42nd Street, 18th Floor, New York, New York 10168, as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.

Cayman Islands

Appleby, our counsel as to Cayman Islands law, has advised us that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments of the U.S. courts obtained against us or our directors or executive officers that are predicated upon the civil liability provisions of the U.S. securities laws or any U.S. state; or (ii) entertain original actions brought in the Cayman Islands against us or our directors or executive officers that are predicated upon the U.S. securities laws or the securities laws of any U.S. state.

We have been advised by Appleby that any final and conclusive judgment for a definite sum (not being a sum payable in respect of taxes or other charges of a like nature nor a fine or other penalty) and/or certain non-monetary judgments rendered in any action or proceedings brought against our Company in a foreign court (other than certain judgments of a superior court of certain states of the Commonwealth of Australia) will be recognized as a valid judgment by the courts of the Cayman Islands without re-examination of the merits of the case. On general principles, we would expect such proceedings to be successful provided that the court which gave the judgment was competent to hear the action in accordance with private international law principles as applied in the Cayman Islands, and the judgment is not contrary to public policy in the Cayman Islands and has not been obtained by fraud or in proceedings contrary to natural justice.

British Virgin Islands

We have been advised by Appleby that neither the Reciprocal Enforcement of Judgments Act (1922) nor the Foreign Judgments (Reciprocal Enforcement) Act (1964) applies to judgments from courts in the United States, and, therefore, any final and conclusive monetary judgment from courts in the United States (foreign court) for a definite sum against the Company based upon any document may be the subject of enforcement proceedings in the courts of the British Virgin Islands under the common law doctrine of obligation by action on the debt evidenced by the judgment of such competent foreign court. A final opinion as to the availability of this remedy should be sought when the facts surrounding the foreign court’s judgment are known, but, on general principles, we would expect such proceedings to be successful provided that:

Hong Kong

Robertsons, our counsel as to Hong Kong law, has advised us that there is currently no arrangement providing for the reciprocal enforcement of judgements between Hong Kong and the United States, as such judgments of United States courts will not be directly enforced in Hong Kong. However, under common law, a foreign judgment (including one from federal or state court in the United States) obtained against the Company may generally be treated by the courts of Hong Kong as a cause of action in itself and sued upon as a debt between the parties. In a common law action for enforcement of a foreign judgment, the judgment creditor has to prove that (i) the judgment is in personam; (ii) the judgment is in the nature of a monetary award; (iii) the judgment is final and conclusive on the merits and has not been stayed or satisfied in full; and (iv) the judgement is from a court of competent jurisdiction. The defenses available to the defendant in a common law action for enforcement of a foreign judgment include breach of natural justice, fraud and contrary to public policy of Hong Kong. In order to enforce the foreign judgment at common law, fresh proceedings must be initiated in Hong Kong, which involves issuing a Writ of Summons and Statement of Claim attaching the foreign judgment as proof of the debt.

USE OF PROCEEDS

Based upon an assumed initial public offering price of $6.50 per Ordinary Share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, we expect to receive approximately US$10,621,250 (or approximately US$12,425,000 if the underwriters exercise their over-allotment option to purchase additional Ordinary Shares in full), of net proceeds from this offering after deducting underwriting discounts and commissions and estimated offering expenses of approximately US$1,403,750 payable by us.

We currently intend to use:

CAPITALIZATION

The following table sets forth our capitalization as of December 31, 2022:

The as adjusted information below is illustrative only, and our capitalization following the completion of this offering is subject to adjustment based on the actual net proceeds to us from the offering. You should read this table in conjunction with “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

The number of our Ordinary Shares to be outstanding after this offering is based on 9,375,000 Ordinary Shares outstanding as of July 6, 2023, the sale of 2,000,000 Ordinary Shares in this offering and excludes any exercise by the underwriters of the over-allotment option to purchase up to 300,000 Ordinary Shares in connection with this offering.

DIVIDENDS AND DIVIDEND POLICY

No dividends were paid by the companies comprising our Group for the years ended December 31, 2021 and 2022. However, on June 27, 2022, our Company distributed a special dividend of HK$22,000,000 (US$2,803,130) to our shareholders to offset the amounts due from the related parties. There is no guarantee that our Company will further declare and pay dividends in the foreseeable future.

We have adopted a dividend policy, according to which our Board shall take into account, among other things, the following factors when deciding whether to propose a dividend and in determining the dividend amount: (i) operating and financial results; (ii) cash flow situation; (iii) business conditions and strategies; (iv) future operations and earnings; (v) taxation considerations; (vi) interim dividends paid, if any; (vii) capital requirements and expenditure plans; (viii) interests of shareholders; (ix) statutory and regulatory restrictions; (x) any restrictions on payment of dividends; and (xi) any other factors that our Board may consider relevant. The payment of dividends, in certain circumstances, is also subject to the approval of our shareholders, the Companies Act and our Articles of Association as well as any other applicable laws. Currently, we do not have any predetermined dividend distribution ratio.

Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. In addition, we are a holding company and depend on the receipt of dividends and other distributions from our subsidiaries to pay dividends on our Ordinary Shares.

There are no foreign exchange controls or foreign exchange regulations under current applicable laws of the various places of incorporation of our significant subsidiaries that would affect the payment or remittance of dividends. As a holding company, we may rely on dividends and other distributions on equity paid by our Operating Subsidiaries for our cash and financing requirements. We are permitted under the laws of the Cayman Islands and our memorandum and articles of association (as amended from time to time) to provide funding to our Operating Subsidiaries incorporated in Hong Kong through loans or capital contributions. Our Operating Subsidiaries are permitted under the respective laws of Hong Kong to provide funding to us through dividend distribution without restrictions on the amount of the funds. If any of our Operating Subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict its ability to pay dividends to us. As of the date of this prospectus, our Operating Subsidiaries have not experienced any difficulties or limitations on their ability to transfer cash between each other; nor do they maintain cash management policies or procedures dictating the amount of such funding or how funds are transferred. There can be no assurance that the PRC government will not intervene or impose restrictions to prevent the cash maintained in Hong Kong from being transferred out or restrict the deployment of the cash into our business or for the payment of dividends. During the years ended December 31, 2022, and 2021, we did not declare or pay any dividends, and there were no transfers of assets among us or our Operating Subsidiaries. However, on June 27, 2022, we approved, declared and distributed a special dividend of HK$22 million (approximately US$2.8 million) to our shareholders. This special dividend was distributed from the retained profits accumulated from prior years and was paid to offset the amount due from related parties. Apart from this special dividend distribution, we intend to retain all available funds and future earnings, if any, for operations and business development and do not anticipate declaring or paying any dividends in the foreseeable future.

DILUTION

Investors purchasing our Ordinary Shares in this offering will experience immediate and substantial dilution in the adjusted net tangible book value of their Ordinary Shares. Dilution in adjusted net tangible book value represents the difference between the initial public offering price of our Ordinary Shares and the adjusted net tangible book value per share of our Ordinary Shares immediately after the offering.

Historical net tangible book value per share represents our total tangible assets (total assets excluding goodwill and other intangible assets, net) less total liabilities, divided by the number of outstanding Ordinary Shares. After giving effect to the sale of Ordinary Shares in this offering by the Company at an initial public offering price of US$6.50 per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, after deducting US$975,000 in underwriting discounts and commissions and estimated offering expenses payable by the Company of approximately US$1,403,750, the adjusted net tangible book value as of December 31, 2022 would have been approximately US$13,006,250, or US$1.14 per share. This represents an immediate increase in adjusted net tangible book value of US$0.89 per share to our existing stockholders and an immediate dilution of US$5.36 per share to new investors purchasing Ordinary Shares in this offering.

The following table illustrates this dilution on a per share basis to new investors.

SELECTED SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA

The following summary consolidated financial data as of December 31, 2021 and 2022 and for the years ended December 31, 2021 and 2022 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary financial data set forth below should be read in conjunction with, and are qualified by reference to, “Selected Summary Consolidated Financial and Other Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and notes thereto included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with U.S. GAAP. Our historical results do not necessarily indicate results expected for any future period.

The following table presents our selected consolidated statements of income and comprehensive income for the years ended December 31, 2021 and 2022.

The following table presents our selected consolidated balance sheets data as of December 31, 2021 and 2022.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this prospectus. This discussion and analysis and other parts of this prospectus contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under “Risk Factors” and elsewhere in this prospectus. You should carefully read the “Risk Factors” section of this prospectus to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Overview

We are a Hong Kong based retailer principally engaged in the sale of natural and organic food under our “Greendotdot” brand. Our Group’s history can be traced back to 1999 when Mr. Wong and Ms. Cheuk started the business of marketing natural and organic foods. The same year, we launched our first retail store with the objective to introduce quality products from local and overseas suppliers to our customers. Over the years, we have been building our “Greendotdot” brand by sourcing, procuring, marketing and selling a wide variety of quality products which can be broadly classified into (i) packaged foods; (ii) fresh foods; (iii) frozen foods; and (iv) other products, such as honey, beverages, edible oils, seasonings and other non-food items.

According to the Frost & Sullivan Report, our Group ranked as the second largest natural and organic food retail chain in Hong Kong in terms of our revenue, translating to a market share of approximately 7.9% in the natural and organic food market in Hong Kong in 2021. For the years ended December 31, 2021 and 2022, our Group’s revenue amounted to approximately HK$159,546,000 (US$20,527,000) and HK$161,453,000 (US$20,729,000), respectively. Our net profit was approximately HK$4,013,000 (US$516,000) and HK$5,880,000 (US$755,000) for the respective years.

Factors affecting our performance

Our results of operations have been and will continue to be affected by a number of factors, including those set out below:

The business is affected by any material change in the economic condition in Hong Kong

Our Group’s results of operations are vulnerable to the economy in Hong Kong. We sell our natural and organic food through sales channels in Hong Kong to our end customers. We also expect to further expand in Hong Kong by opening new retail stores in the next few years. The results of operations of our Group are therefore directly affected by the demand for our customers in Hong Kong, and such demand depends upon many factors, most of which are beyond our Group’s control, including, among others, the general economic condition in Hong Kong and the disposable income of our customers.

Product mix

We currently offer a comprehensive range of over 600 products, including (i) packaged foods; (ii) fresh foods; (iii) frozen foods; and (iv) other products, such as honey, beverages, edible oils, seasonings and other non-food items. We believe our diverse product offerings enable us to capitalize on changing market trends and consumer preferences. Different products have different gross profit margins depending on factors such as purchase costs, production costs, our pricing strategy and our marketing and branding strategy. As a result, our overall gross profit margin will vary depending on product mix across different products. Our sales composition, margins and profit level have varied and may continue to vary as our product mix evolves. Our ability to expand our product offerings and the diversity of our product mix will have a significant impact on our results of operations and our competitiveness in the market. However, market conditions may vary from time to time, and the pace of such change may be so quick that the market demand may not favor our products with higher profit margin.

Change in the cost of inventories sold

Our Group’s business is highly dependent on a sufficient supply of raw materials (including beans, organic powders and rice) and finished products from our suppliers that meet our quality requirements, and our financial performance is sensitive to price fluctuations of these supplies. During the years ended December 31, 2021 and 2022, the prices of different raw materials and finished products from our suppliers varied to different extents. For the years ended December 31, 2021 and 2022, the costs of inventories sold, which primarily represented the costs of products charged by our suppliers, amounted to approximately HK$72,431,000 (US$9,287,000) and HK$76,289,000 (US$9,795,000), representing approximately 45.4% and 47.3% of our Group’s revenue, respectively. The raw materials and finished products purchased by us are generally determined by prevailing market conditions and subject to fluctuation in market prices. Although our Group will continue to monitor our procurement cost and implement any necessary cost control measures, the fluctuations in the price of raw materials and finished products procured may affect the profit margin of our operations.

Ceased operations of Food Factory

We previously conducted the packaging process for certain types of products in our Food Factory during the fiscal years ended December 31, 2021 and 2022 but ceased to do so in May 2023 as the ownership of the Food Factory was transferred to an independent third-party. Currently, our Operating Subsidiaries outsource our packaging processes to various independent third-party outsourcing partners and if they are unable to perform the packaging that meets our standards at specifications, we may need to incur additional costs to find other suitable outsourcing partners who are capable of complying with our standards. There is no material financial impact on our net sales or revenues, income from continuing operations, profitability, liquidity or capital resources as a result of outsourcing the packing processes as we regularly monitor the related cost as part of our cost-control measures.

Impact of the COVID-19 pandemic on our business and operations

Our Operating Subsidiaries’ business operations are based in Hong Kong. Due to the anti-epidemic measures implemented in Hong Kong during the COVID-19 pandemic, our Operating Subsidiaries have not experienced any material disruption in our Operating Subsidiaries’ business operations, and there was no significant impact on our Operating Subsidiaries’ retail business given that all of our Operating Subsidiaries’ retail stores remained open with normal opening hours since the outbreak of COVID-19.

Management does not believe the supply chain disruptions related to the COVID-19 pandemic will materially affect our long-term outlook and business goals, results of operations, or capital resources and quantity, sales, profits, and/or liquidity. However, continued supply chain disruptions could lead to delayed receipt of, or shortages in, inventory and higher costs and negatively impact our sales. Our Operating Subsidiaries maintain a large network of suppliers to mitigate these risks. In cases where certain products are purchased from single source suppliers, we have sourced alternatives from different suppliers to allow for more versatility and flexibility. Management does not believe that such mitigation efforts have introduced any other new material risks, including but not limited to, those related to product quality or reliability or regulatory approval of products. Furthermore, management does not believe there will be any supply chain issues that would adversely affect the enhancement of a new food factory.

There has been no material delay in the local delivery of our Operating Subsidiaries’ products to their retail stores and their customers since the outbreak of COVID-19. Given that there are no compensation clauses for the delay in delivery of products to customers, any unexpected delay of delivery to their customers due to the COVID-19 pandemic will not result in any penalty or compensation payable by our Group.

We observed that consumer sentiment has turned cautious under the COVID-19 pandemic, and the spending patterns of consumers have changed with consumers’ demand and gradually shifted to food and daily necessities. In fact, the sales volume of our Operating Subsidiaries’ food products to retail customers via retail sales has been boosted, especially during the critical stage of the COVID-19 pandemic in Hong Kong, as (i) consumers were more willing to spend on healthy products as a result of rising health awareness; (ii) some customers have resorted to panic buying and stockpiling of food and necessities; and (iii) owing to the social distancing measures, such as restrictions imposed on catering premises and the “Stay-Home-Safe” policy as promoted by the HKSAR Government, more people have opted to dine at home to minimize the chance of infection, thereby purchasing more of our goods for take home consumption.

Business outlook

The development of the natural and organic food market in Hong Kong has very much been influenced by western countries for the past 20 years. Given the internet boom and the rise of social media, consumers in Hong Kong have become more aware of food choices for health and food safety reasons, hence creating an opportunity for the natural and organic food market to grow in recent years. Currently in Hong Kong, most natural and organic foods are imported from overseas and are being sold at natural and organic food stores, supermarkets and department stores. Moreover, there are also organic farms in Hong Kong that produce organic food locally and distribute to various retailers for sale.

Results of operations

The following is a summary of the consolidated statements of income of our Group as derived from our consolidated financial statements included elsewhere in this prospectus, and this summary should be read in conjunction therewith.

Revenues

The Company has established various sales channels for its products, comprising (i) retail sales to consumers via retail stores, online sales platforms and exhibitions, through supermarkets and department stores; and (ii) wholesales to bulk-purchase customers. The following tables set out the analysis of the Company’s net revenue from external customers disaggregated by sales channels for the years ended December 31, 2021 and 2022:

Our revenue increased by approximately HK$1,907,000, or 1.2%, from approximately HK$159,546,000 for the year ended December 31, 2021 to approximately HK$161,453,000 (US$20,729,000) for the year ended December 31, 2022, primarily due to the increase in sales volume from our wholesales channels during the year ended December 31, 2022.

Cost of sales

The following table sets forth the breakdown of our cost of sales for the years ended December 31, 2021 and 2022:

Our cost of sales increased by approximately HK$4,446,000 or 5.2%, from approximately HK$84,958,000 for the year ended December 31, 2021 to approximately HK$89,404,000 (US$11,479,000) for the year ended December 31, 2022, primarily due to the increase in the cost of inventories and the storage fees during the year ended December 31, 2022.

Selling and marketing expenses

The following table sets forth the breakdown of our selling and marketing expenses for the years ended December 31, 2021 and 2022:

Our selling and marketing expenses decreased by approximately HK$469,000 or 1.0%, from approximately HK$47,306,000 for the year ended December 31, 2021 to approximately HK$46,837,000 (US$6,013,000) for the year ended December 31, 2022, primarily due to an increase in channel distribution expenses to supermarkets and department stores and offset by the decrease in lease charges due to rental concessions due to COVID-19 granted by our landlords for our retail shops during the first half of 2022.

General and administrative expenses

The following table sets forth the breakdown of our general and administrative expenses for the years ended December 31, 2021 and 2022: